China’s central bank digital currency (CBDC) initiative is expanding its deployment to wholesale uses cases. The Shanghai Clearing House will support digital yuan usage for commodities transactions from today. It is China’s largest central counterparty (CCP) responsible for clearing and payment for financial transactions.
While using digital yuan is not mandatory, initially the digital currency settlement service will be free to encourage adoption.
This latest announcement is for commodities, but the Shanghai Clearing House is responsible for the clearing and settlement of many financial transactions apart from stocks. So that includes bonds, interest rates swaps, foreign exchange (FX), credit and commodities. Last year the CCP cleared RMB 552.6 trillion ($76.4 trillion) in transactions.
The growth in usage of the digital yuan has been mixed. By including figures from high value transactions, the next set of reported RMB figures should be significantly higher. There was a previous announcement of digital currency usage for securities settlement, although that was a more limited example versus the largest central counterparty.
The government last reported statistics for digital RMB adoption for the period to August 2022. While the number of personal wallets opened reached 261 million by the end of 2021, the wallet figure was not updated in 2022. And growth was helped by many mass cash giveaways. Total transaction values grew to RMB 100bn ($13.9bn) by the end of August 2022, a 20% increase on the May 2022 figures.
