Soochow Securities, a Chinese securities firm, has created history by being the first company to use the digital yuan in securities trading.
The move was confirmed by the China Securities Journal, noting that the People’s Bank of China (PBoC) gave the green light for deploying the digital yuan in investment advisory products. According to the report, Soochow Securities customer Wu was the first person to buy securities via the digital yuan mobile wallet.
The introduction of the central bank digital currency (CBDC) in the securities industry has been in the pipeline for the PBoC. The Chinese central bank included the plans in its 14th Five-Year Plan and 2023 long-term goals to improve the “steady promotion of digital currency research and development.”
Suzhou-based Soochow Securities has been collaborating with the PBoC since 2021 in the pilot stage of the digital yuan. The firm has been in the vanguard of developing innovative application solutions for the digital yuan, including payments and the use of smart contracts.
In the deployment of securities, Soochow Securities provided technical and structural assistance to the PBoC, including “complete technical docking” of the offering.
The firm stated its goals were to “effectively let the majority of securities investors experience the safety, convenience, and efficiency of digital RMB services, and drive the high-quality development of the securities industry and Suzhou’s local digital economy.”
Suzhou’s local government hailed the initiative as a positive one for developing a healthy financial system. Suzhou formed part of the initial clutch of four cities selected for the digital yuan trials.
“We must deepen joint innovation and strive for more national first-of-its-kind scenarios to be implemented in Suzhou,” a joint statement from the Suzhou Municipal Party Committee and the Municipal Government read.
All the wheels are in motion
Development for the digital yuan has reached a frenetic pace with the PBoC, including the metrics around the CBDC in its latest financial report. The central bank noted that there was $2 billion worth of digital yuan in circulation, representing 0.13% of the entire currency sum in circulation.
The PBoC’s recent feature precedes the inclusion of a traditional Chinese method of gifting funds in the New Year. Users can now send “red packets” to family and friends using the digital yuan wallet app with the addition of customizable messages.
The mobile app has been downloaded over 200 million times while transaction volumes have soared past $12 billion since the start of trials. With the trial expanding to more cities and provinces, pundits predict a spike in the digital yuan’s figures.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs and BSV
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