China’s Dalian Commodity Exchange has successfully used the digital yuan for fees settlement in the nation’s futures market, making it the first real application of the People’s Bank of China (PBoC) issued digital currency in the finance sector, according to a report by China Securities News Network on August 23, 2021.
Digital Yuan Facilitates Cost-Efficient Payment
In a first, China’s central bank digital currency (CBDC), which is also known as the digital yuan, DCEP, digital renminbi or e-CNY, has been successfully used for payment by players in the country’s futures market.
Per sources close to the matter, Dalian Commodity Exchange, a non-profit, self-regulating exchange that has been in existence since 1993, used DCEP to pay storage fees to the delivery house named Dalian Llangyan Group Storage and Transportation Co.
Notably, the transaction was jointly facilitated by the Dalian branch of Bank of Communications, as well as the Dalian branch of the Bank of China, with the parties claiming that the digital renminbi offered significant cost-efficiency.
Jiang Bin, manager of Dalian Liangyun Group Storage and Transportation Co., Ltd said:
“Compared to traditional bank remittance payment systems, the digital renminbi payment for storage fees comes with zero handling charges, superfast payment processing, and more.”
DCEP Playing an Important Role
Chinese authorities have been doing everything within their powers to permanently shut out public cryptocurrencies like bitcoin (BTC) from the country in order to give the digital yuan a chance to flourish and it appears the move is gradually paying off.
A spokesperson for the DCEP project has reiterated that the promotion of the digital yuan in the country is very important for the continuous development of the nation’s technology, economy, and society in general.
While there have been several successful trials of the digital yuan in real-life scenarios in recent months, the payment solution has not been used in the financial markets. With this latest milestone, the team says it firmly believes that in the near future, DCEP will power business innovations and gain significant traction in the financial markets.
According to the Bank of International Settlements (BIS), at least 80 percent of central banks across the globe are working on their CBDC, with a handful of them already in the advanced stages of the project.
As reported by BTCManager on August 19, 2021, the Bank of Thailand (BOT) has revealed plans to roll out its CBDC in Q2, 2022.