The Shanghai branch of the Bank of China has completed the first settlement of precious metals using the digital yuan. The transaction, finalized on December 19, allowed the Shanghai Gold Exchange to close a $14 million precious metal trade after receiving the funds overseas, according to local media reports.
Bank of China Completes First Cross Borders Precious Gold Transaction With Digital Yuan
The Shanghai branch of the Bank of China announced that it has completed the first precious metal settlement using the digital yuan, the Chinese central bank digital currency (CBDC). The bank worked closely with the Shanghai Gold Exchange to transact the funds received overseas with the digital yuan. The transaction involved paying $14 million in exchange for undisclosed precious metals.
According to local media, this would be the first time the Chinese digital yuan is used to complete a fine metal transaction. A spokesperson for the Shanghai branch of the Bank of China stressed the relevance of this trade to set up Shanghai as an international financial hub. He stated:
The account will contribute financial strength to support Shanghai’s in-depth implementation of the free trade pilot zone promotion strategy and promote the quality and upgrading of the international trade center.
This is the second milestone the Bank of China has reached using the digital yuan this month. On Dec. 14, the bank facilitated a transaction between its Shanghai and Hong Kong branches, facilitating a settlement between Baosteel Group, a steel and iron company, and Bao-trans Enterprises, a manufacturer of premium steel products. The $3.4 million imported iron ore payment marked the debut of the digital yuan in the commodities arena.
China is also making efforts to introduce international digital yuan retail payments, as it recently announced a partnership with the Monetary Authority of Singapur (MAS) to implement a pilot program that will allow tourists to use the digital yuan for tourism purposes in both countries.
What do you think about using the digital yuan in precious metals settlements? Tell us in the comments section below.
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