Key Takeaways
- Central Bank of China added 26 banks to CBETS on Tuesday to boost cross-border digital yuan adoption.
- Mbridge hit $55B in volume by January, with 95% in digital yuan, aiming to challenge SWIFT’s market share.
- In April, the yuan dropped to 2.85% on SWIFT, as firms seek alternatives to avoid market sanctions.
China Intensifies Global Digital Yuan Push With New Institutional Partners
China is doubling down on its digital yuan internationalization push, including global institutions in its cross-border payment network.
According to local reports, on Tuesday, the Central Bank of China onboarded 26 domestic and foreign institutions to a platform that enables the use of the digital yuan, China’s central bank digital currency ( CBDC), for cross-border settlements.
These 26 institutions are Chinese bank branches located in Brazil, Qatar, Thailand, Hong Kong, and Macau, China, and will now be part of CBETS, China’s Cross-border e-CNY Transfer Services.
Lu Jing, CEO of Standard Chartered China, which was also included in the network, highlighted the relevance of this milestone, stressing that “an efficient, convenient and compliant cross-border payment experience will further enhance the international use of yuan.”
Industrial and Commercial Bank of China said that CBETS participants “can leverage the platform’s capabilities to offer clients low-cost, diversified and secure cross-border digital payment services, supporting the facilitation of trade and investment and China’s broader push for high-level financial opening up.”
Reports indicate that Mbridge, a platform that also offers digital yuan settlement services, registered over $55 billion in volume by January. 95% of this volume was transacted in digital yuan, even though it is designed to support other CBDCs such as the digital dirham.
This move opens yet another path for institutions dealing with Chinese counterparts to skip the traditional payment system, which can be marred by compliance issues and secondary sanctions, and step into a reliable, yuan-based payment rail.
This seems to be the goal of the Chinese institutions, as the yuan’s use has not been rising in traditional benchmark networks, such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT). In April, the yuan dropped to sixth place in global payments, transacting 2.85% of the registered volume.
