China expands digital yuan usage for cross-border trade

China is expanding the use cases for its central bank digital currency (CBDC), the digital yuan, also known as e-CNY, to promote cross-border trade in its Belt and Road initiative. The digital yuan was one of the first CBDCs to be developed and widely tested, with the government having expanded its testing parameter to include multiple cities and millions of people.

Xuzhou, a trade hub in Jiangsu province, plans to promote the use of e-CNY to pay for services and storage charges for goods carried by cross-border trains, according to a plan promoting the use of the Chinese digital currency in cross-border trade that was issued in the city. There are 18 regular cross-border rail connections from Xuzhou to 21 nations in Asia and Europe, making it an ideal location to pilot the use of e-CNY in cross-border payments.

The Hong Kong Monetary Authority (HKMA) is also testing the digital yuan as a cross-border payment tool in the Guangdong-Hong Kong-Macau Greater Bay Area. “The HKMA is working with mainland’s central bank, the People’s Bank of China, to test the digital yuan as a cross-border payment tool in Hong Kong,” said HKMA deputy chief executive Darryl Chan. The Chinese government hopes to improve efficiency and reduce the cost of cross-border transactions with these pilot projects.

Jiangsu province has been proactive in promoting digital yuan use cases, with Changshu, another city in the province, announcing that it will pay civil servants and people who work for public institutions using digital yuan. The Chinese government has ramped up its CBDC efforts at a time when the international trade markets are moving away from the standard U.S. dollar. Recently, China has completed multiple trade treaties with the likes of Russia and India based on their national currency over the U.S. dollar.

While the digital yuan has not yet been officially launched, the government’s efforts to test and expand its usage suggest that it is moving closer to a launch. The expansion of the digital yuan’s use cases for cross-border trade is part of a broader trend towards the digitalization of currencies, with other countries also exploring the use of CBDCs. China’s efforts in this area may give it a competitive advantage in the international trade markets, particularly as countries seek to diversify away from the U.S. dollar.

In addition to its use in cross-border trade, the digital yuan may also have implications for domestic payments in China. The Chinese government plans to use the digital yuan to reduce its dependence on the traditional banking system and to increase financial inclusion for those who are currently unbanked. The success of the digital yuan could also help China to expand its economic influence in the Asia-Pacific region and beyond, as other countries adopt its use in cross-border trade and potentially even domestic payments.


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JPMorgan Partners with DBS Group and Temasek to Develop Blockchain-Powered Trade Platform

Leading American bank JPMorgan has joined hands with Singapore-based investment company Temasek and DBS Group Holdings to create a blockchain-enabled foreign exchange settlement, trade, and payment platform for seamless cross-border transactions. 

Leveraging blockchain technology to curb trade frictions

The company behind the new blockchain-powered platform will be called Partior. It will utilize blockchain technology to streamline cross-border currency settlements, trade, and payments by minimizing current latency and frictions. 

As per the announcement:

“Partior is expected to develop wholesale payment rails based on digitized commercial bank money to enable “atomic” — or instantaneous — settlement of payments for various types of financial transactions, according to the statement. That would help banks overcome challenges presented by the current standard sequential method of processing global payments.”

Even in the digital era, cross-border payments are at times cumbersome and slow, which is a challenge the blockchain-enabled platform intends to solve.

According to Sopnendu Mohanty, the chief fintech officer at the Monetary Authority of Singapore:

“The launch of Partior is a global watershed moment for digital currencies, marking a move from pilots and experimentations toward commercialization and live adoption.”

In the future, the blockchain-powered platform is expected to be designed to complement the ongoing central bank digital currency (CBDC) initiatives. 

JPMorgan is continuously being involved in the crypto/blockchain space. For instance, the top American bank established an investment “basket” linked to eleven crypto-focused companies like Nvidia, Square, and MicroStrategy last month.

The debt instrument will enable investors to have direct exposure to a basket of more firms, such as PayPal, Advanced Micro Devices, Taiwan Semiconductor Company, Intercontinental Exchange, CME Group,, and Silvergate Capital.

This new financial product is expected to allow institutional investors to gain exposure to the cryptocurrency market without actually holding digital assets directly. 

Image source: Shutterstock


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Australia Uses Blockchain to Enhance Cross Border Trade With Singapore

The Australian Border Force (ABF) has launched a blockchain trial that is targeted at enhancing cross border trade with Singapore. According to the news release by the Australian Border Force, the blockchain infrastructure will make businesses between Australian outfits simpler, paperless, and more cost-efficitent.

Australia, Singapore, Blockchain, Trade

The blockchain trial which is already live was launched in conjunction with the Singapore Customs and Singapore Infocomm Media Development Authority (IMDA) and it seeks to test the digital verification systems by the respective agencies in line with trade facilitation.

According to the ABF, trial will test digital verification platforms across both the ABF-developed Intergovernmental Ledger (IGL) and IMDA’s TradeTrust for electronic trade documents. Businesses, as well as regulators, will be required to verify Certificates of Origin using the blockchain systems and give feedback on their unique experiences. As noted, those that will be involved in the process include The Australian Chamber of Commerce and Industry, Australian Industry Group, as well as financial institutions in Singapore, including ANZ amongst others.

“The ABF welcomes the opportunity to collaborate further with Singapore to improve cross-border trade between our countries,” said Michael Outram, Australian Border Force Commissioner. “In addition to our efforts internationally, this initiative will incorporate paperless trading and secure, digital exchange of trade information as part of the future architecture and design of an Australian Trade Single Window.”

The use of blockchain technology innovations or infrastructure to enhance cross border trades is not uncommon in the cryptosphere. Standard Chartered reportedly made a significant milestone by completing its first cross-blockchain trade finance pilot transaction between Hong Kong and China. Series of innovations like this have sprung up with multinational banks taking the lead.

Besides the noted Standard Chartered’s milestone, HSBC also piloted the completion of a pilot live blockchain letter of credit (LC) transaction in Malaysia back in October.

Image source: Shutterstock


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