Iran and Belarus Join SCO
China’s leader, President Xi Jinping, recently gave a speech at the 2023 Shanghai Cooperation Organization (SCO) Summit, a transcript of which was shared by Xinhua News Agency. The president utilized this platform to extend a warm welcome to Iran as the latest full member of the SCO, along with expressing his appreciation to Belarus for its recent decision to join the organization.
Emphasis on Central Bank Digital Currencies
President Xi underscored the pivotal role of central bank digital currencies (CBDCs), particularly the digital yuan, during his address at the summit. The use of CBDCs, he maintained, could become instrumental in future economic transactions among SCO nations.
The People’s Bank of China, earlier in the year, had announced that the total value of digital yuan CBDCs in circulation amounted to 13.61 billion. However, this only constitutes a minuscule portion of the total money supply.
Advocating for SCO Local Currency Settlements
The Chinese leader further proposed a broadening of the use of local currency settlements within the framework of the SCO countries. His proposal included the promotion of sovereign digital currency collaboration and the initiation of SCO development banks.
Adoption Challenges for Digital Yuan
Despite these optimistic remarks, the digital yuan has encountered hurdles in achieving mass acceptance. Regardless of the sustained promotion of this digital currency, it has struggled to achieve widespread distribution and usage.
Concluding Remarks
In conclusion, President Xi Jinping’s address at the SCO Summit reiterated China’s strategic vision for the SCO and digital currencies. This vision represents a blend of traditional finance and fintech innovation, which are expected to shape the future of economic cooperation in the region. Even though the digital yuan has faced challenges, its importance was emphasized as a cornerstone of this vision, signifying the potential digital currencies have in the financial landscape of the future.
