China’s Guanxi Region in the South Implements Digital Yuan Adoption Plan, Promoting its Use as Trade Currency with ASEAN Countries.
China Accelerates Digital Yuan Pilot Program for Trade Integration with ASEAN Countries.
The Chinese government is intensifying its efforts to expand the pilot program of the digital yuan, its central bank digital currency, with the aim of incorporating it into trade settlements with nations belonging to the Association of Southeast Asian Nations (ASEAN) bloc. The local branch of the People’s Bank of China (PBOC) has reported that the autonomous region of Guanxi in southern China will introduce a range of digital yuan functions on a national scale, including the introduction of innovative features specific to the region.
Digital Yuan to Feature Prominently at China-ASEAN Expo and Cross-Border Trade Transactions.
As part of its ongoing efforts to promote the digital yuan, China is set to showcase its central bank digital currency during the upcoming China-ASEAN Expo scheduled for September. The autonomous region of Guanxi will play a key role in utilizing the digital currency during the event, as well as facilitating cross-border trade transactions with other Asian countries. While the digital yuan has already undergone testing in various cities and even been used for wage payments, this latest move signifies China’s first steps towards internationalizing its digital currency for trade settlements.
Undermining the Power of the Dollar
The global adoption of the digital yuan has been seen as a means to reduce reliance on the U.S. dollar for trade settlements. It is also viewed as a way to bypass U.S. dollar-based sanctions by utilizing an alternative digital payment system.
In March, Ju Jiandong, a specialist in U.S.-China trade conflicts, highlighted the significance of the digital yuan in promoting the widespread use of the yuan in international markets. He explained that this relied on the establishment of a digital global currency system.
The government considers Guanxi as a crucial region for fostering collaboration and trade agreements with ASEAN countries. In the first four months of the year, Chinese exports to ASEAN countries reached a value of $185.2 billion, as reported by customs data.
ASEAN countries are also working to decrease their dependence on the U.S. dollar. They are advocating for the use of their own national currencies in trade settlements to safeguard against any potential impacts arising from geopolitical factors.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
