HONG KONG—China’s digital yuan performed well during in the world’s largest cross-border central bank digital currency (CBDC) trial to date, according to one new report, which suggests Beijing is seeking to speed up yuan globalization efforts amid rising geopolitical tensions.
China’s digital currency, or e-CNY, was the most issued, and actively transacted token in the $22 million pilot that used CBDCs to settle cross-border trades, a Bank of International Settlement report showed, according to the Business Recorder.
The report said the six-week test, which ended late last month, is part of m-Bridge—a project that pilots cross-border payments in digital currencies issued by central banks of China, Hong Kong, Thailand and United Arab Emirates
The successful completion of the large-scale testing comes amid rising global tensions, the Business Recorder noted.
“Many countries around the world, including China, are wary of US financial sanctions,” G. Bin Zhao, senior economist at PwC China, told Business Recorder.
“This provides a historic window for China to promote yuan internationalization as the US weaponizes the dollar,” he said, adding that the e-CNY provides a shortcut.
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