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14 Apr 2021  (411 Views) 
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China


How to use e-CNY in international transactions
I share my thoughts on how the digital CNY (e-CNY) can be used for international payments, without being a reserve currency.

The importer open e-CNY account and converts USD into e-CNY at the current exchange rate. He can use a bank that is willing to make this conversion. The e-CNY is held by the platform that is guaranteed by the China government. 

The exporter has e-CNY account and notifies the importer about that account. The importer transfers the e-CNY into the exporter's account.

The e-CNY platform operates like PayPal. The accounts are held by the platform and not by the banks. However, the account holder can provide a linkage to their bank account.

On receiving the e-CNY, the importer can keep the money in the platform (and maybe earn a modest rate of interest) or converts the money into USD or another currency and transfer it to the bank. 

Many people and businesses are already familiar with the PayPal platform. They will find it easy to use the new e-CNY platform. 

All the best to the e-CNY platform.

Tan Kin Lian

 


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