China’s central bank has opened a new operations center for its digital currency, the digital yuan, in Shanghai. The center will handle cross-border payments, blockchain services, and digital asset operations.
According to a report from Xinhua News Agency, the People’s Bank of China’s new digital yuan center aims to boost the digital yuan’s use in international finance through three platforms: a cross-border digital payment platform, a blockchain service platform, and a digital asset platform.
The payment platform uses legal digital currency to address common issues in traditional international payments. The blockchain service platform aims to enable smooth transfer of transaction information and on-chain digital yuan payments across different industries. Finally, the digital asset platform offers ready-to-use, financial-grade digital asset services.
In the same report, Lu Lei, Deputy Governor of the People’s Bank of China, said the development of cross-border digital currency infrastructure will follow the principles of “no loss, compliance, and interoperability.” He noted that a preliminary system for cross-border digital yuan payments is already in place.
Broader strategy
The new digital yuan center is a part of a wider plan unveiled by PBOC Governor Pan Gongsheng in June this year. The plan was created with the aim of increasing China’s role in global finance. The strategy includes measures such as developing yuan futures and promoting the issuance of offshore bonds through Shanghai-based companies.
Moreover, China has already been increasing the use of the yuan in international trade, with its domestic payment system, CIPS, being adopted by foreign banks. The country is also exploring yuan-backed stablecoins to reduce reliance on the U.S. dollar and expand the currency’s global reach.
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