The Chinese iron ore sector is shifting towards blockchain-powered cross-border platforms to conduct trade deals in the national currency yuan (RMB), rather than the more usual USD transactions, as importers begin to adopt the technology.
According to China Economic Net, some of the world’s biggest iron miners have called for the adoption of blockchain platforms to sell the material straight to Chinese companies without the greenback involved whatsoever.
The report suggests importers also want to adopt the upcoming digital yuan as soon as it’s launched officially in the country, in order to make transactions less dependent on American currency.
Powered by blockchain
Recently, Ansteel Group International Economic and Trade Co., Ltd. and Rio Tinto Group completed an RMB 100 million ($14.44 million) cross-border settlement transaction powered by blockchain.
During an interview with International Finance News, a representative of Rio Tinto commented on the blockchain-backed transaction:
“As early as 2014, we conducted RMB transactions with Baosteel. In 2019, we also established a port business. Now, Chinese customers can buy our products in small quantities from Chinese ports and pay in RMB. As the main supplier of Chinese customers, we believe that port sales can help us better serve our existing customers."
Xinhua News Agency also reported on August 10 that in the first half of the year, RMB cross-border receipts and payments amounted to RMB 12.7 trillion ($1.83 billion), a year-on-year increase of 36.7%.
In April, Cointelegraph reported that a blockchain-backed cross border platform pilot had been implemented in the Chinese city of Qingdao. The companies involved have now made their first trades with partners in North America and Southern Asia.