Chinese Region of Guanxi Embraces Digital Yuan for ASEAN Trade Ties
In a move aimed at strengthening trade ties with ASEAN nations, the Chinese autonomous region of Guanxi is set to launch an extensive adoption plan for the digital yuan. This pilot program marks a significant step towards utilizing digital currency on an international scale.
Digital Yuan for Trade Settlements with ASEAN Nations
The
Chinese government is leading the way by expanding the pilot program of the
digital yuan, their central bank's digital currency, to facilitate trade settlements
with countries within the Association of Southeast Asian Nations (ASEAN) bloc. Reports from the local branch of the
People's Bank of China (PBOC) indicate that Guanxi will implement various
functions of the digital yuan nationwide while also pioneering unique local
functions.
These
local functions include utilizing the digital currency during the upcoming
China-ASEAN Expo scheduled
for September as well as facilitating cross-border trade transactions with
other Asian countries. Although the digital yuan has undergone testing in several cities and has even been used for
wage payments, this initiative represents one of China's initial steps towards
internationalizing the digital currency as a trade settlement tool.
Internationalization of the Digital Yuan
The
internationalization of the digital yuan is seen as a means to reduce reliance
on the US dollar in trade settlements and circumvent dollar-based sanctions
through an alternative digital payment system.
Ju
Jiandong, an expert in US-China trade conflicts, emphasized the significance of
the digital yuan in popularizing the yuan in foreign markets, noting the
importance of establishing a digital international currency system.
The
Chinese government recognizes Guanxi as a crucial region for fostering
cooperation and trade agreements with ASEAN countries. In the first four months
of this year, Chinese exports to ASEAN nations amounted to USD 185.2 billion,
according to customs data.
ASEAN
countries themselves are taking steps to lessen their dependence on the US
dollar and advocating for the use of national currencies in trade settlements
to safeguard against geopolitical repercussions.
What
is your take on the implementation of the digital yuan in the Guanxi region to
promote its adoption in cross-border settlements? Please post your comments.
0 Comments