Residents who received "red packets" of digital yuan use the money in stores in Shenzhen, Guangdong Province. Photo: Li Hao/GT

China's central bank-backed digital yuan was used by the Dalian Commodity Exchange to pay for storage charges in a local warehouse on Tuesday, marking the first time that the sovereign digital currency has been applied in the futures market.  

Compared with traditional bank transfers, paying such a fee with the digital yuan has certain advantages, including the absence of commission charges and real-time updates on receipt. Also, users don't face the operating time constraints of large payment systems, state broadcaster CCTV reported on Tuesday.  

Analysts said the first successful application of the digital yuan in the futures market provides a highly efficient, safe and convenient payment choice for futures exchange and market participants. 

It also paves the way for more trial runs of the digital currency in financial markets, cross-border payments and even nationwide large-scale applications. 

China has been accelerating its digital yuan push in recent years amid a heated global race, a move that analysts said could create a new, parallel financial system to challenge US dollar hegemony. 

This year, the central bank has expanded trials of the digital yuan to both real-life and online scenarios in a number of cities such as Beijing, Shanghai, Shenzhen, and Suzhou, East China's Jiangsu Province. 

The digital currency now can be used to pay subway fares, shop online and buy products at a variety of vendors. It is also expected to be used in the upcoming 2022 Beijing Winter Olympics, allowing foreigners to open digital wallets and participate in the test. 

Chinese cities are also actively promoting the use of the digital yuan in advancing fintech innovation. 

On Tuesday, the Shanghai local government said in its 14th Five-Year plan (2021-25) on building the city into a global financial center that it will steadily push forward trials of digital yuan applications and enrich the application scenarios.

In July, China's central bank issued a white paper on the research and development of the digital yuan, which said that the nation will expand the coverage of pilot test application scenarios, based on the testing.

China will combine this work with the development plan and local characteristics in order to achieve full coverage of application scenarios and create a digital yuan ecosystem to further explore new models that are compatible with China's economy and society, the white paper said.