CBDCs are digital currencies issued and controlled by central banks
CBDCs are based on blockchain networks
CBDC transaction histories are unchangeable, offer financial transparency
China’s CBDC pilot trials started over a year ago and has expanded to major Chinese cities
Photo Credit: Unsplash/ Ezreal Zhang
China, that became one of the first nations in the world to launch trials of its CBDC, is expanding its trials to accommodate more lenders. Standard Chartered China has become the latest bank that has joined China's CBDC pilot which is now in its advanced stage. What this essentially means is that the Standard Chartered Bank in the Asian nation will now allow its users to access the digital version of the Chinese Yuan by integrating its platform with China's special app that is dedicated to its CBDC.
A CBDC or a Central Bank Digital Currency is the blockchain representation of fiat currencies. Transactions via CBDCs are expected to not only reduce the reliance on paper notes, but also keep transaction history transparent and tamper-proof. Along with digital yuan, China's CBDC is also recognised as the e-CNY or the digital RMB (renminbi).
Now, Standard Chartered has become one of the world's largest multinational banks to get involved into a CBDC trial.
“As an important infrastructure for the digital economy, the development of digital RMB will gradually improve the payment and consumption experience and strengthen interconnection with the international financial market,” the bank said in an official statement on November 27.
Back in July, the Bank of China started testing an offline payment system which would work in integration with SIM cards. When enabled, this offline payment system will only require the users to bring their phones close to the sale terminals to initiate CBDC payments.
Around April 2022, China also made its CBDC trials available in 23 cities including Shanghai, Beijing, and Shenzhen. Residents in these cities were allowed, in fact encouraged, to pay for goods and services with the e-CNY.
“Standard Chartered looks forward to continuously expanding the application scenarios of digital renminbi, including cross-border merchant payments, trade financing and supply chain financing, to continue to meet the needs of individual and corporate customers,” the bank further noted in its statement.
Meanwhile India, Japan, and the US are among other nations that are also in the advanced phases of their CBDC-related research and development initiatives. They aim to diversify people's choices in-terms of financial settlements.
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