8.2 C
New York
Friday, December 3, 2021
HomeCryptoCurrencyChina's digital yuan to achieve global reach thanks to alliance with SWIFT

China's digital yuan to achieve global reach thanks to alliance with SWIFT

The Society for Worldwide Interbank and Financial Communications (SWIFT), administrator of the most used network for bank transfers, collaborates with the Central Bank of China in investigations on the digital yuan (e-yuan).

According to a Reuters Agency report, this would be a sign that China is exploring the global use of its digital currency , which is still in the testing phase. Other entities collaborating with the investigation are the China International Payment System (CIPS) and the China Payment and Clearing Association, under the supervision of the People’s Bank of China (PBOC).

The participants of this alliance came together to form a company called Finance Gateway Information Services. Its commercial scope includes the integration of information systems, data processing and technology consulting. In this new company, SWIFT is the majority shareholder, with 55% of the capital owned.

The Hong Kong newspaper South China Morning Post hypothesized about the Chinese government’s motivation to involve SWIFT in the development of its digital currency. According to this medium, the Asian giant seeks, in this way, to increase its economic power in order to rival the United States as a world power.

For their part, SWIFT spokespersons, in statements to the aforementioned newspaper, assured that the organization is impartial: “As a neutral cooperative, SWIFT always acts for the benefit of the entire community of members.” They added that for more than 30 years they have participated in the financial markets of China and that their performance in the new company will allow them to “strengthen services to support the commercial objectives of customers” in that nation.

expansión moneda digital china swift
The alliance with SWIFT would favor the expansion of China’s currency globally. Source: moerschy / pixabay.com

According to Sputnik, the Russian government news agency, the CIPS system (Chinese analog of SWIFT) does not have the necessary infrastructure to adopt the e-yuan in international trade on a global scale. Although it is a system used by more than 900 institutions in almost 100 Asian markets, it could be a limitation for further expansion of China’s digital currency.

China wants to have the digital yuan ready by 2021

The tests on the digital yuan are in an advanced stage. As reported by CriptoNoticias, the objective of the Chinese Government is that the central bank’s cryptocurrency is fully operational for the Winter Olympics, which will be held in Beijing next year.

The most recent Evaluations on the use of the digital yuan are being carried out in the city of Suzhou. There, on February 10, 2021, 30 million e-yuan were distributed, which is equivalent to about USD 4.6 million. The 150 thousand people who were winners of a lottery will be able to spend their 200 e-yuan until February 26 in physical and online stores in that city.

In addition to China there are other countries that are giving Steps in the race for central bank digital currencies (sometimes referred to as CBDCs). The most advanced is the Bahamas, which already has its digital sand dollar in operation since October 2020.

Each central bank digital currency has particular characteristics, depending on the country in which it is going to to emit. Even so, they share common characteristics, among them, their centralization and partial anonymity. The laws of each country will stipulate who can have access to the database that records all transactions.

Follow World Weekly News on

Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

Leave a Reply

Must Read