by Derek Andersen, Coin Telegraph:
CBDC and de-dollarization saw major strides last week with the 1-million-barrel deal on the Shanghai Petroleum and Natural Gas Exchange.
The digital yuan has been used for the first time to settle an oil transaction, the Shanghai Petroleum and Natural Gas Exchange (SHPGX) announced. PetroChina International bought 1 million barrels of crude on Oct. 19.
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The transaction was a response to a call by the Shanghai Municipal Party Committee and Municipal Government to apply the Chinese central bank digital currency (CBDC), also referred to as the e-CNY, to international trade, the exchange said. It is “another major step forward” for the digital yuan, according to the state-controlled China Daily.
The seller and the price in the transaction were not disclosed. For comparison, the price of the “OPEC basket” of oil from 13 producers was $95.72 per barrel on Oct. 19.
The crude oil deal also marks an overall major step in the use of the yuan on the international market and in the global movement toward de-dollarization. In the first three quarters of 2023, the use of the yuan in cross-border settlements was up 35% year-on-year, reaching $1.39 trillion, China Daily reported.
#DEDOLLARIZATION DAILY: 💥PETRODOLLAR SHOCK💥
Shanghai Oil, Gas Exchange Settles First Cross-Border Trade in E-Yuan#DigitalYuan is a game changer!#fintech #finserv@psb_dc@efipm@baoshaoshan@thecyrusjanssen@lajohnstondr@Kathleen_Tyson_@DOualaalouhttps://t.co/8qT4Oq2X1o
— Richard Turrin (@richardturrin) October 22, 2023
The yuan was first used for a liquified natural gas (LNG) purchase on SHPGX in March when the French TotalEnergies agreed to sell LNG to the China National Offshore Oil Corporation (CNOOC). The second LNG deal in yuan occurred last week between CNOOC and French Engie. Those transactions did not involve the digital yuan.
