Chinese Energy Giant PetroChina Sets New Precedent with e-CNY Crude Oil Deal

In a historical first, PetroChina – a Chinese-state-owned oil and gas company – has officially completed its first international crude oil trade using the digital yuan (e-CNY).

The Shanghai Petroleum and Natural Gas Exchange (SHPGX) announced the transaction on Friday, confirming that PetroChina has bought 1 million barrels of oil. The identity of the seller and the exact yuan-based value of the deal were not disclosed, according to China Daily.

The digital yuan is a central bank digital currency (CBDC) issued by the People’s Bank of China. Usable in both domestic and international transactions, the currency was launched with the partial goal of eliminating cash while also combatting money laundering and terrorist financing.

The SHPGX said on its website that the PetroChina deal is part of its effort to meet government requirements to use the e-CNY in cross-border trade.

Back in March, the SHPGX facilitated the first yuan based based purchase of liquified natural gas between the China National Offshore Oil Corporation and France’s TotalEnergies.

Cross-border transactions using e-CNY reached 10.16 trillion yuan ($1.36 trillion) from January to September, according to the central bank.

Despite volatility this year, a senior researcher from the Bank of China – Youxin – said its prevalence among international organizations is growing. Its growing use within emerging economies is a big contributing factor, with the Bank of Argentina announcing in June that it would make RMB deposits and withdrawals available within its banking system.