China established a currency trading center on the China-Vietnam border on Saturday that many say will help end rampant illegal private currency trading.
The ASEAN (Association of Southeast Asian Nations) Currency Business Center, initiated by the Agricultural Bank of China (ABC) in Dongxing City of south China's Guangxi Zhuang Autonomous Region, will allow direct convertibility of the Chinese yuan and the Vietnamese Dong, said Zhang Xiaogao, general manager of the International Business Department of the ABC's Guangxi branch.
The center, the first of its kind in China, will boost convenience for business people in the border areas, Zhang said, adding that it could help end rampant illegal private currency trading.
Exchanges between the two currencies had to be conducted via the U.S. dollar in local banks, contributing to traders that provide illegal services of direct RMB-Dong exchanges in the cross-border region.
Pan Yong, a professor with Business School of Guangxi University, pointed out that owing to lack of supervision, border merchants and tourists were likely to be cheated by private currency traders with counterfeit money.
"These 'bank stalls' challenge the country's foreign exchange management," he said.
Pan pointed out that the center is a more secure and convenient way to exchange money, which will be a big blow to private currency traders.