Tech companies, commercial banks and local-level governments in China further promoted the use of the digital yuan (e-CNY) in the run-up to and during the June 18 or “618” shopping festival and carried out trials in more fields like lending and tax refunds. On May 30 and June 9, the Shenzhen Municipal Government distributed red packets worth CNY30 million denominated in the digital currency via a lottery on Meituan. The money could be spend at 15,000 offline merchants as well as online for food delivery, ride-hailing and hotel-bookings. The total number of orders increased by 58.9% year-on-year and the total order value rose by 64.6% year-on-year. Meituan users showed an enthusiasm for consumption using the e-CNY. From May 30 to June 19, the average daily number of orders on Meituan paid in e-CNY rose by about 115%, compared with the number from May 9 to May 29.
JD Technology, a subsidiary of e-commerce giant JD, joined hands with Bank of Communications (BoCom), Postal Savings Bank of China and Ping An Bank to distribute red packets worth more than CNY10 million in digital yuan from May 31 to June 18 in 23 areas participating in China’s e-CNY pilot. During this period, the value of consumption on JD paid in e-CNY reached CNY400 million, exceeding the total value between December 2020, when JD started participating in the pilot, and May this year. The Agricultural Bank of China’s branch in Taicang, Jiangsu province, issued a loan of CNY1.5 million in e-CNY to a new material technology company, which it used to pay one of its suppliers.
The People’s Bank of China (PBOC) has published a circular to improve policies for cross-border renminbi settlement in e-commerce and other new modes of foreign trade. The circular, effective July 21, has enlarged the scope of transactions eligible for cross-border renminbi settlement that involves payment institutions from the goods and services trade to all transactions under the current account. It detailed requirements for banks and payment institutions to carry out settlement services and specified arrangements for authenticity verification and anti-money laundering.
Experts said the circular provides more detailed rules concerning cross-border renminbi settlement while enlarging the scope of eligible transactions. This will help meet growing demand for cross-border renminbi settlement from foreign trade companies in the face of greater flexibility in the currency’s exchange rate. Making all transactions under the current account eligible for renminbi settlement will help enterprises avoid currency exchange risks when it comes to payment of expatriate salaries and repatriation of investment returns generated overseas. Use of the renminbi in cross-border trade amounted to CNY806 billion in May, up 33.84% year-on-year, according to Wind Info, the China Daily reports.
