A central bank digital currency trial focused on cross-border transactions involving China, Thailand, Hong Kong and the United Arab Emirates has been completed, as Beijing tries to internationalise its digital yuan.
More than 160 cross-border payments and foreign-exchange transactions totalling more than US$22 million were made during the first trial involving four central bank currencies and real-value transactions, the Bank for International Settlements (BIS) said, with Chinese state-owned banks participating.
The development comes as the US dollar is surging against other currencies and triggering capital outflows out of emerging markets, threatening their economic health.
The multiple Central Bank Digital Currency (mCBDC) Bridge test developed by the BIS was designed to deliver real-time, cheaper and safer cross-border payments and settlements, it said.
Bank of Communications said that it and four other Chinese banks had completed the test to settle payments for corporate customers.
State media reported on Thursday that Industrial and Commercial Bank of China and Agricultural Bank of China were among the 20 participating commercial banks.
China has been testing its digital currency in major cities, mainly for domestic retail payments, though the central bank has also vowed to explore cross-border payments in digital yuan.
The world’s second-largest economy has said it is willing to discuss setting global standards for digital fiat currency as the international monetary system develops.
Russia, sanctioned by the West over its war in Ukraine, has also announced plans to use its own digital currency to trade with China.