Chinese authorities approved the digital yuan (e-CNY) for transactions in the securities market. The Industrial and Commercial Bank of China (ICBC) will develop the product.
The China Securities Regulatory Commission (CSRC) approved the use of the digital yuan by China Galaxy Securities in the securities market. The pilot of the central bank digital currency (CBDC) asset management product will be set up with the ICBC, China’s largest bank and the world’s leading commercial bank.
Specifically, the ICBC will act as a custodian and manage the custody funds of clients of companies that trade securities using the e-CNY. Representatives of the bank will separate cash held as deposits from funds involved in trading operations.
The ICBC and Galaxy Securities have been testing various options for using the digital yuan in a regulatory sandbox starting in 2021. Among others, they used CBDCs for trading in foreign financial products. The ICBC also acted as a custodian of funds in these processes and integrated the e-CNY with the digital wallet for asset management.
According to Luo Liming, Vice President of Galaxy Securities, the digital yuan will make securities transactions more secure and faster, as well as ensure safe, controlled, and traceable capital flows.
The PRC authorities are actively testing various scenarios of using the e-CNY, from paying for public transportation to cross-border trade and payments to civil servants.
