China has reportedly recruited 26 financial institutions for its digital yuan effort.
According to a Tuesday (June 16) report from Reuters, the effort is part of China’s plan to expand efficient and low-cost cross-border payments and promote global adoption of the yuan.
The agreement lets participants to join the Cross-border e-CNY Transfer Services, or CBETS, an integrated cross-border settlement platform that supports round-the-clock digital payment connections with central banks and financial institutions in other countries.
“Fintech is fundamentally reshaping the underlying logic of cross-border payments and providing new momentum and pathways for them,” said Jean Lu, CEO of Standard Chartered China, one of the first foreign banks to join the program.
“An efficient, convenient, and compliant cross-border payment experience will further enhance the international use of the yuan,” Lu added.
Industry sources told Reuters that the People’s Bank of China is making a major effort to boost both foreign and domestic use of digital yuan, setting the country on a different path from the U.S. in determining the future of money.
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China gave a dozen additional banks the green light to handle its digital yuan in March, a source told Reuters.
The U.S., meanwhile, has shifted away from its central bank digital currency plans under President Donald Trump as stablecoins gain more favor, and the future of these coins in America remains a matter of some debate.
In an interview with CoinDesk last month, Timothy Massad, former chairman of the Commodity Futures Trading Commission (CFTC), said that while the White House might publicly disavow CBDCs, the evolution of tokenized finance will eventually force a government-backed version into existence.
Less than two weeks later, Federal Reserve Governor Christopher Waller argued in a speech that there is nothing that “requires a CBDC and only a CBDC to fix” while also calling the coins a “solution in search of a problem.”
It’s why “almost every major central bank in the world has just stopped” pushing for CBDCs outside of China and Europe, Waller said. “They just can’t find a reason for this.”
PYMNTS wrote in April that the government’s opposition to CBDCs was noteworthy for its timing, considering the activity surrounding digital currency elsewhere in the world.
“Globally, CBDCs are advancing,” that report said, specifically mentioning China’s efforts.
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