Companies in Shenzhen in mainland China made up one-third of the transaction volume in a cross-border central bank digital currency (CBDC) bridge pilot project, according to a report by Chinese media outlet 21Caijing, citing Shenzhen’s local financial authority.
- mBridge is a CBDC transaction initiative jointly launched by China, the United Arab Emirates, Hong Kong and Thailand, aiming at a real-time 24-hour payment channel between Asia and the Middle East. It just closed a pilot project with US$22 million in transactions between the four countries.
- Shenzhen-based companies traded around US$7.3 million through the bridge, according to Forkast calculations.
- The payments mainly occurred in import and export trades, said the Shenzhen Local Financial Supervision Bureau.
- Shenzhen is a major city in southeastern China that shares a border with Hong Kong, with an export volume of US$302 billion in 2021. It became one of the first pilot cities for China’s CBDC, the digital yuan, in 2020.
- Currently, some 105 countries, representing 95% of the world’s GDP, are exploring CBDCs. Interoperability between the CBDCs is considered an upcoming hurdle. International financial organizations including the Bank for International Settlements, IMF and SWIFT are exploring solutions for cross-border CBDC transactions.