The deal, notably the first of its kind in China, has confirmed the many use cases and benefits of the Chinese digital currency after rounds of tests.
China has used the digital yuan to implement an oil transaction, which is a landmark moment in the crypto space. The Chinese digital currency was used to settle the deal, involving a million barrels of crude. PetroChina paid for the crude via the Chinese CBDC, according to a press release by the Shanghai Petroleum and Natural Gas Exchange (SHPGX).
“In recent years, adhering to the principles of internationalization, marketization, and specialization, the Shanghai Oil and Gas Trading Center has actively expanded its domestic business while actively exploring international oil and gas trading business to provide faster, more stable, and more efficient transactions for international resources to enter the Chinese market,” said a translated version of the press release.
Chinese authorities have been promoting the use of the CBDC for some time. With the digital yuan’s first international transaction of this scale, its adoption could reach greater heights. China has also made efforts to internationalize its currency and leverage the Chinese CBDC for it. If further transactions are successful using the digital yuan, major deals could also happen similarly in the future.
Earlier in March, China used the yuan for international oil transactions. The use of the yuan in cross-border settlements has also been growing steadily, hitting $1.39 trillion. It had increased 35% year-on-year. But the digital yuan has made its foray into such deals for the first time.
The Chinese government has also made recent efforts to simplify the digital yuan app. Visa and Mastercard options recently made a debut in the app to boost adoption. The development could increasingly help tourists in China as well, with the global use cases of Visa and Mastercard.