IATA plans to integrate the digital yuan into settlement systems – What does this mean for the airline industry?

International Air Transport Association (IATA) Integrates Digital Yuan into Settlement Systems

The International Air Transport Association (IATA) is planning to integrate the digital yuan into its settlement systems by the end of 2024 to expand payment options. This integration will be based on the Chinese central bank’s digital currency, also known as the digital yuan or e-CNY. The decision stems from the need to adapt to evolving payment preferences associated with the increasing use of digital currencies.

China Invoicing and Settlement Plan

According to Muhammad Albakri, IATA’s Senior Vice President for Financial Settlement and Distribution, China’s digital currency will be made available through the China Invoicing and Settlement Plan at the request of the China Airlines Committee within IATA. In addition to integrating the digital yuan, IATA is also considering the potential implementation of other digital currencies into its settlement systems, although specifics and a rollout timeline have not been disclosed.

Advancements in Digital Currencies

Earlier this year, IATA added the Chinese Offshore Yuan to its Currency Clearance Service, enabling airlines to settle sales funds in the selected currency. This solution assists in cash management and currency risk reduction, marking a significant step towards streamlining financial operations in the aviation industry.

Success of Digital Yuan in China

Changchun Mu, the head of the Digital Currency Research Institute at the People’s Bank of China, shared that by July, the digital yuan platform had registered 180 million personal wallets and recorded a total transaction value of 7.3 trillion yuan (1.02 trillion dollars) in pilot regions. This demonstrates the increasing popularity of digital currencies as an alternative means of payment and the effectiveness of efforts made towards their implementation.

The incorporation of the digital yuan into IATA’s settlement systems could prove to be a significant step towards modernizing the aviation industry and adapting to changing payment trends worldwide.