Imagine an authoritarian regime combining the most robust asset in the history of humankind with the most intangible one. Washington and Brussels are taking notes.
In the past few month, the Chinese economy has been characterized by efforts of its companies, banks, and city governments to adopt and embrace the digital yuan. According to directives from Beijing, the capital of China, all these actors are giving emphasis on using the new, state-sanctioned CBDC (Central bank digital currency) in gold recycling. In China, as well as in India and many other Asian countries, there is an extensive market to buy and sell gold in the form either of family heirlooms or gold bars (Bob Menendez style).
According to finance-focused media outlet JRJ, the Shenzhen branch of China’s Central People’s Bank of China (PBoC), China’s FED, has joined forces with the Shanghai Gold Exchange to launch a CBDC-backed gold recycling initiative. This collaborative effort also involves the local government of Shenzhen’s Futian District, the Shenzhen branch of the China Construction Bank, and the gold trading firm Jinyafu. Together, they are exploring the feasibility of settling gold recycling transactions using the digital yuan, likely utilizing technology developed by Jinyafu. The popularity of gold recycling, already part of their culture, has surged in China over the past decade.
