The International Air Transport Association (IATA) has announced plans to integrate China’s central bank digital currency, the digital yuan (e-CNY), into its billing systems by the end of 2024.
According to an Oct. 29 report from Times Aerospace, IATA aims to update its financial systems to accommodate the growing adoption of digital currencies.
IATA’s senior vice president for financial settlement and distribution services, Muhammad Albakri, stated, “With the increasing use of digital currencies, IATA’s industry financial settlement systems must adapt to support the needs of those using our services.”
Digital Yuan to Be Accessible Through China’s Billing and Settlement Plan
The digital yuan will be available through China’s Billing and Settlement Plan, following a request from IATA’s China Airline Committee. This addition aims to provide airlines operating in China with a streamlined payment solution and addresses the growing demand for digital currency options among Chinese travelers.
While the digital yuan will be the first central bank digital currency integrated into the system, IATA has also indicated that it is assessing other digital currencies for possible future integration. However, no specific details or timelines for these other currencies have been released.
Supporting Multi-Currency Operations
This move builds on IATA’s recent expansion of its currency options for international airlines. Earlier in the year, IATA added the Renminbi Offshore (CNH) to its Currency Clearance Service, increasing the total number of supported currencies to 74.
This expansion enables airlines to manage sales funds in their preferred currencies, assisting with cash flow management and foreign exchange risk reduction.
The People’s Bank of China (PBoC) has seen a growing adoption of the digital yuan. In October, Changchun Mu, director-general of the PBoC’s Digital Currency Institute, reported that by July, the digital yuan platform had registered 180 million personal wallets and achieved a cumulative transaction volume of ¥7.3 trillion ($1.02 trillion) across various pilot regions.