A Chinese power provider says it has completed the first digital yuan smart contract transaction in the solar power industry.
Per the Yangtse Evening Post (via Sohu), the State Grid Suzhou Power Supply Company struck the CBDC contract with the materials and textiles firm Suzhou Shicheng Material Technology.
The power provider is the local arm of the State Grid, the Chinese state-owned electric utility corporation.
The materials firm had struck a smart contract loan-type financing deal with a local bank branch.
After the company used electricity over an agreed period, the provider issued a bill, causing the contract to close.
The company’s digital yuan wallet was automatically debited after the issuance of the bill.
Smart Contract Benefits
The media outlet claimed the development allowed for “precise loan repayments,” and heralded the advent of solar power provision “based on smart contracts.”
The firms claimed that this marked “another breakthrough in the photovoltaic settlement and supply chain financing” industries.
Suzhou, in Jiangsu Province, was one of the first major Chinese cities to join the digital yuan pilot.
In recent years, the Suzhou branch of the State Grid says it has “actively promoted the application of the digital yuan in the power industry.”
In August last year, the company announced the launch of CBDC-powered supply chain financing services.
The firm says it wants to help “small and medium-sized enterprises” both “upstream and downstream of the power grid industry chain.”
And it says its solutions will help “small and micro enterprises alleviate problems caused by difficult and expensive financing.”
The energy provider also claims that its solution is attractive for banks, other financial institutions, and lenders, as it reduces “risk.”
The power provider is now working on a solar power industry-specific smart contract solution with China Merchants Bank.
The solution involves data-sharing between photovoltaic electricity providers and banks.
Corporate customers are automatically debited for standing charges and electricity fees.
Solar Power the Latest Target for China’s Digital Yuan Expansion?
The media outlet added that the materials firm had initially sought a loan due to an unexpected need to buy and process raw materials.
The company applied for a loan to cover its costs, and was able to fast-track its application using the smart contract solution.
The materials firm’s CEO was quoted as stating:
“The traditional financing cycle for small and micro enterprises is long-winded. It is also time-consuming. Smart contract technology has helped us meet our pressing needs. It will help smaller companies secure bank financing more conveniently and faster.”
🇨🇳 China Aiming for International Digital Yuan Expansion – e-CNY Going Global?
There are clear signs China wants to take the digital yuan, its CBDC, into the global arena – with CIPS and BRI integrations in the pipelines.#CryptoNews #Chinahttps://t.co/kfP637WNSu
— Cryptonews.com (@cryptonews) October 26, 2023
Digital Yuan Pilot Expanding
Also this week, Chinese police warned of a rise in digital yuan-themed money laundering scams.
And earlier this month, the city of Shenzhen’s Yantian District launched a digital yuan giveaway event for newlywed couples.
The digital yuan is currently being used in 26 cities in 17 Chinese provinces, although no official launch date for a nationwide rollout has yet been announced.
Chinese banks have begun exploring cross-border application cases for the coin, with the e-CNY making its way as far as Taiwan and Hong Kong in recent months.
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