China launches cross-border payment system with digital Yuan
China's cross-border payment system has just been launched using the digital yuan, bypassing the Swift system
China has made a strategic and quiet move in cross-border payments. They are now based on the digital yuan for transactions with 10 ASEAN countries and six Middle Eastern countries, bypassing the Swift system.
The People’s Bank of China has been the entity in charge of connecting the digital RMB, which gives China a victory over the prevalence of the US dollar in the global economy.
The best part is that “while the SWIFT system still suffers delays of 3 to 5 days for international payments, the Chinese digital bridge has reduced that time to 7 seconds.” As an example, the first test run between Hong Kong and Abu Dhabi is cited, in which a company transferred funds to a Middle Eastern supplier without having to go through six intermediary banks. The funds were received in real time and with 98 % lower fees.
According to reports, 23 central banks are participating in this Chinese digital currency bridge.
Regarding this accelerated decision by China, the Bank for International Settlements (BIS) indicated that the Asian country is “defining the rules of the game in the digital currency era.”
The benefits are notable not only in terms of transaction speed, but also in enabling full traceability and the automatic application of anti-money laundering regulations.
M.Pino
Source: notitarde
(Reference image: Adam Śmigielski on Unsplash)
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