China’s central bank digital currency (CBDC) was used for the first time to buy precious metals. The Bank of China successfully transferred 100 million digital yuan (e-CNY) to buy gold through the Shanghai Stock Exchange.
The Bank of China made the precious metal purchase with the CBDC. According to a report in the local media, the first cross-border transaction using the digital yuan as part of the settlement of a gold transaction was carried out.
The Bank of China’s Shanghai branch transferred 100 million yuan ($14 million) using the e-CNY, purchasing gold bullion via the Shanghai Stock Exchange.
A representative of the Bank of China said the transaction involved the bank’s branches in Shanghai and Hong Kong, thanks to which the funds were successfully converted and transferred overseas. They added that the first results of using the digital yuan in cross-border transactions with precious metals will help expand free trade opportunities in Shanghai in the future, developing the region as an international trade hub.
The pilot project of China’s CBDC is actively developing. The digital currency is used for cross-border trade and payments to civil servants, with large multinational financial conglomerates in Hong Kong, Taiwan, and the United Kingdom testing the e-CNY.
In addition to cross-border initiatives, Chinese authorities make it easier for Chinese citizens to use the digital currency. The e-CNY can be used for offline payments, purchasing securities, and participating in cash prize giveaways, as well as for payments via WeChat. Meanwhile, tourists wishing to visit China can create a digital wallet for the e-CNY and buy the digital currency via Visa and Mastercard debit cards.
The Chinese government’s Web3 initiatives are not only about actively promoting the CBDC. The authorities have repeatedly voiced ambitious plans for the future as part of the development of various sectors of blockchain technology. According to the latest document published by China’s Ministry of Industry and Information Technology, the government launched a special committee to develop new business models based on NFTs and dApps. The plan includes research funding, international cooperation, and pilot projects that focus on digital identity based on distributed ledger technology (DLT).
China’s latest tech initiatives extend far beyond the financial ecosystem, so authorities are interested in increasing the number of blockchain experts in the country. The National Blockchain Technology Innovation Center (NBTIC) was launched in Beijing specifically for this purpose.