China Completes First Cross-Border Digital Yuan Payment to Malaysia

China has successfully completed its first cross-border digital yuan payment to Malaysia. On August 1, China Construction Bank (CCB) branches in Xiamen and Labuan settled a payment of approximately $6,360 for a shipment of fresh durian in just 30 minutes. This milestone transaction highlights the potential of China's central bank digital currency (CBDC), known as e-CNY.

The payment was made directly between CCB branches without using the SWIFT messaging system or intermediary banks, eliminating fees and conversion costs associated with traditional cross-border payments. The success of this trial is seen as a key step towards establishing China's e-CNY as an alternative to SWIFT for international trade settlements.

China has been developing its CBDC since 2019-2020, initially testing it domestically in cities like Shenzhen and Suzhou before expanding to cross-border transactions. Southeast Asia is a strategic region for the country's e-CNY efforts, given the strong trade ties between China and ASEAN countries.