A state-owned Chinese bank, the Bank of China, has partnered with the city of Yiwu to link the digital yuan to the “world’s biggest small commodities market.” The Bank of China, a leading commercial bank majority-owned by the Chinese state, aims to enhance cross-border payments through the integration of digital yuan interoperability options into Yiwu Pay, a global payment platform.
The Bank of China’s Cross-Border CBDC Drive
The Bank of China, in collaboration with Yiwu, is spearheading a new initiative to boost cross-border transactions using the digital yuan. Yiwu, located in Zhejiang Province, houses a sprawling 7km-long market where thousands of vendors sell small commodities to importers worldwide.
The Bank of China’s deal with Yiwu will enable digital yuan payments for merchants at the market, facilitating seamless cross-border transactions. By integrating cross-border capital circulation compliance solutions, the platform will ensure adherence to foreign exchange compliance protocols. Some Yiwu-based merchants have already successfully implemented this solution.
Yiwu: The Global Capital of Small Commodities
Yiwu, unofficially known as the “world’s capital of small commodities,” is renowned for its manufacturing and trading of various items such as clothing, toys, household goods, smartphone accessories, and jewelry. The city has established trade relations with more than 230 countries and regions. Yiwu Pay, the global payment platform, plans to provide services to 100 countries and regions, supporting payments in 16 fiat currencies.
Yiwu’s market is not only physically popular among tourists but has also expanded its online presence, serving many leading international e-commerce platforms. With 90% of its vendors currently accepting digital yuan payments, the city aims to process approximately $1.5 billion worth of CBDC transactions by the end of the year.
“Digital yuan interoperability options added to Yiwu Pay will provide a seamless and efficient cross-border payment experience for merchants and enhance the global reach of the digital yuan.”
– Bank of China spokesperson
Chinese banks have been actively working to establish the digital yuan in the cross-border payments space, and this collaboration between the Bank of China and Yiwu represents a significant step forward in achieving this goal.
