The mainstream introduction of blockchain technology has opened doors for advancing traditional finance systems. Over dozens of nations are closely developing their central bank digital; China stands at the top of the list as its digital yuan is in the pilot mode of cross-border transactions.
Every nation has its own aim to launch CBDC or digital; some aim to reduce the reliance on the U.S dollar in international trade. The usage of the Chinese Yuan in cross-border transactions has gained significant traction in 2024.
Overall cross border Yuan payments surged by 21% YoY from January to August, hitting the 41.6 trillion Yuan mark, as per the Central Bank of the People’s Republic of China.
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Swift, the world’s largest interbank messaging service, stated that Yuan’s share of global transactions accounted for 4.69% in August.
In a September 30, 2024 statement, the bank said, “For the next step, the People’s Bank of China will further enhance the fundamental systematic arrangement of the yuan’s cross-border use.”
According to Blockdata, China is home to over 5,000 firms registered with “blockchain” in their name, and the country ranks number one in the number of blockchain projects globally.
China’s Stance on Cryptocurrencies in 2024
China’s stance on digital assets in 2024 remains the same as in 2021 when it restricted all cryptocurrency-related activities. While China doesn’t recognize cryptocurrency as a legal tender, the country actively promotes blockchain technology.
In the last few years, the authorities of China have identified and dismantled many crypto-related scams, frauds, and other related activities. There is rough speculation that the government has a treasury of digital assets seized in different cases.
It was reported by a Chinese media outlet in 2020 that the authorities have seized 194,775 BTC, 833,083 ETH, and seven other coins after cracking down on a multi-billion fraud scheme.
On September 30, 2024, Todayq reported that Zhu Guangyao, the former finance minister, said in a speech during an economic forum at Tsinghua University that the nation should pay more attention to cryptocurrencies.
He quoted while talking to a regional media outlet, “It does have negative effects, and we must fully recognize its risks and harm to the capital market, but we must study the latest international changes and policy adjustments because it is a crucial aspect to the development of the digital economy.”
China has been leading the race to reduce its reliance on the US dollar, followed by Russia and other emerging nations. Russia also actively promotes its rubbles and alternative payment systems like Mir and SPFS.
Using Chinese currency in cross-border transactions has gained significant momentum this year. According to the People’s Bank of China, total cross-border Yuan payments have risen by 21.1% year-on-year between January and August to hit the 41.6 Trillion Yuan mark, taking the world by surprise.
Using Chinese currency in cross-border transactions has gained significant momentum this year. According to the People’s Bank of China, total cross-border Yuan payments have risen by 21.1% year-on-year between January and August to hit the 41.6 Trillion Yuan mark, taking the world by surprise.