Shenzhen has completed its first large-scale cross-border trade settlement in digital yuan, marking a milestone in applying China’s central bank digital currency (CBDC) to the real economy.
Guided by the Shenzhen branch of the People’s Bank of China (PBOC), Luohu district, together with the Shenzhen branch of the Agricultural Bank of China, facilitated a 68 million yuan (about $9.5 million) cross-border payment for key supply chain enterprises through mBridge, a multi-CBDC platform.
Jointly developed by the Bank for International Settlements (Hong Kong) Innovation Hub, the Bank of Thailand, the Central Bank of the United Arab Emirates, the PBOC’s Digital Currency Institute, and the Hong Kong Monetary Authority, mBridge seeks to build a CBDC-based cross-border payment solution. The platform is designed to be efficient, low-cost, scalable, and regulatory-compliant, using distributed ledger technology to deliver faster, cheaper, and more secure settlements across multiple jurisdictions and currencies.
Unlike the traditional SWIFT system, which typically takes one to three business days, the mBridge-enabled transaction was nearly instantaneous. The settlement not only enhanced efficiency and transparency by enabling “payment upon transaction” but also reduced funds in transit, improved capital utilization, and significantly cut foreign exchange and service costs through disintermediation.