Blockchain based currency could lead the way in cross border transaction when central banks start looking at this digital payment mode more seriously and start the process of decoupling from the traditional system of transaction. While most European and other progressive nations still piloting this new technology, China is way ahead with its Digital Yuan (DY) and considering using digital currency for cross-border transactions.
The People’s Bank of China (PBOC) is in advance talks with Hong Kong Monetary Authority on the technical testing of using the digital yuan for cross-border payments between the mainland and Hong Kong. Transaction between its own territory will be the first approach to test the token in a real world scenario, this will be initiated for large offshore trading purposes. However the Chinese Central Bank is also talking Thailand and the United Arab Emirates in a multilateral research project. China’s digital yuan testing is said to be making steady progress, with more test scenarios coming into use.
Several Chinese cities, including Beijing, Shenzhen and Suzhou, have piloted this digital currency since last year showing positive results with the Central Bank mulling to make the DY a potential replacement of paper currency. This plans will strike a blow on the preferred global trading currency, the US dollar. Digital currency are reputed to be more stable and devoid of manipulation, on concerns of security, the blockchain technology that structures the system is argues by experts as one of the most secure in the world.
China’s bold move could spell the end of USD being used widely in regions and nations that conduct high trade with the mainland, even Malaysia might opt for DY as trade volume between both nations continue to soar. So, then should we start stocking up on the token?
