Bank Of Communications Co.,Ltd. (Bank of Communications) Shanghai branch has recently completed the nation's first cross-border payment transaction utilizing a Free Trade (FT) account upgrade pilot and digital yuan settlement.

The transaction, facilitated by the multilateral central bank digital currency (m-CBDC) bridge, enabled a Shanghai-based chemical logistics company to settle cross-border freight costs. This marks a significant milestone for cross-border financial innovation in the Shanghai Free Trade Zone and expands the use of digital yuan in international scenarios.

The growing demand from real enterprises for cross-border operations highlights persistent pain points in traditional settlement methods, such as lengthy processes, slow fund arrival, and difficulty in transaction traceability. By deepening its role in Shanghai's international financial center development, the bank is actively supporting institutional opening-up in the financial sector.

This innovative business seamlessly combines the dual advantages of the upgraded FT account and digital yuan cross-border settlement, providing the market with a highly efficient and compliant new settlement solution. Under the guidance of the Shanghai Headquarters of the People's Bank of China, the bank leveraged the core institutional strengths of the upgraded FT account—namely 'liberalized flow in the first tier, controlled flow in the second tier, segregated accounting, and penetrating supervision.'

This allowed for precise and regulated circulation of domestic funds across the second tier. Combined with the settlement advantages of the m-CBDC bridge, the solution accurately addresses the core demands of domestic enterprises for transfer efficiency and transaction security in their cross-border operations. The business enables real-time fund arrival for counterparties, effectively enhancing the stability of cross-border transactions, while ensuring the traceability of the entire business process.