So far this year, there have been several developments for China’s central bank digital currency (CBDC) or eCNY. The latter is an extension of cross-border activities using the digital yuan, specifically with ASEAN.

The number of regions involved in national digital yuan pilots continues to expand. Guangxi, on China’s western border with Vietnam, is one of the last to be included. In addition to domestic scenarios, its CBDC pilots plan to target ASEAN with a focus on trade.

Three specified areas include:

• China-ASEAN Cooperation
• Expo China-ASEAN, the largest trade fair in the region
• The Guangxi Pilot Free Trade Zone, which includes a port.

It’s still in the planning stage, so no further details were shared.

Another cross-border digital yuan announcement this week

Guangxi is not the first formal cross-border initiative. Credit for that goes to Hong Kong, which has two completely separate cross-border CBDC initiatives with China.

Last week, Shenzhen, a key city in Guangdong, published regulations to create a digital yuan cross-border demonstration zone for the Guangdong-Hong Kong-Macao Greater Bay Area. This is part of the creation of an International Center for Wealth Management.

Planning for CBDC’s cross-border work with Hong Kong began in 2020 and progressed in 2021, focusing on retail payments.

Separately, there is a wholesale CBDC platform, Project MBridge, which is being developed by the central banks of Hong Kong, China, Thailand, and the United Arab Emirates, as well as the BIS. Since Thailand is a member of ASEAN, working on CBDC with ASEAN is not new. But the difference is that the Guangxi pilots will use the retail CBDC.

Other news about the digital yuan in 2023

CBDC pilots have started to support offline CBDC payments, as well as the use of mobile phones that are turned off. Some phone models can be set before shutdown to specify the number of payments allowed while powered off.

Also, last week, the People’s Bank of China announced that the digital yuan would be included in future M0 reports. The figure at the end of 2022 was 13.61 billion yuan (2 billion dollars).

Meanwhile, a recent opinion piece published in a prominent outlet argued that limiting the use of the digital yuan to cash-like applications was too narrow.