A central bank digital currency trial focused on cross-border transactions has been completed, the Bank for International Settlements BIS said, with Chinese state-owned banks participating in Beijing tries to internationalise its digital currency.
The BIS said more than 160 cross-border payments and foreign exchange transactions totalling more than $22 million were made during the first trial involving four central bank currencies and real-value transactions.
The U.S. dollar is surging against other currencies and triggering capital outflows from emerging markets, threatening their economic health.
The multiple Central Bank Digital Currency mCBDC Bridge tests developed by BIS included China, Hong Kong, Thailand and the United Arab Emirates and was designed to deliver real-time, cheaper and safer cross-border payments and settlements, the BIS said.
Bank of Communications said it and four other Chinese banks had completed the mCBDC Bridge test to settle payments for corporate customers.
State media reported on Thursday that the 20 participating commercial banks were the Industrial and Commercial Bank of China and the Agricultural Bank of China.
China has been testing its digital currency in major cities, primarily for domestic retail payments, but the central bank has also vowed to explore cross-border payments in digital currency.
The world's second-largest economy has said it is willing to discuss setting global standards for digital currency as the international monetary system develops.
Russia, sanctioned by the West over its war in Ukraine, plans to use its own digital currency to trade with China.