The International Air Transport Association (IATA) announced that it will introduce digital currencies into the financial settlement systems it manages for the airline industry around the world. Mohammed Al-Bakri, Senior Vice President for Financial Settlement and Distribution Services at the International Air Transport Association, said: Digitalization affects many aspects of our daily lives, including the currency we use. As the use of digital currencies grows, it is essential that IATA’s industry financial settlement systems adapt to support the needs of those who use our services. Al-Bakri added that the first digital currency to be introduced is the digital renminbi, which will be available in the Chinese Billing and Settlement Plan (BSP) by the end of 2024. “China is one of the most advanced countries in the world in adopting digital currency. Recognizing this trend, the China Airlines Committee of the International Air Transport Association (IATA) has requested the inclusion of the digital RMB in the BSP. “This is an important development and IATA will accommodate the digital renminbi by the end of the year,” he said.
IATA is also examining the possibility of introducing other digital currencies into its settlement systems based on industry needs and requirements. Al-Bakri said: “The experience gained in introducing the digital renminbi will help IATA integrate other digital currencies in the future.”
Al-Bakri explained, “At the heart of the integration of the digital renminbi and all other settlement systems work, there is a need to serve customers and adapt to behavioral changes in payment methods. Payment should be smooth. The customer should not feel frustrated due to the unavailability of his preferred payment method, pointing out that airlines should not lose out on getting the appropriate value from their ticket sales. In July 2024, IATA added the offshore currency renminbi (CNH) to the International Air Transport Association (IATA) Currency Clearing Service (ICCS), bringing the total number of currencies handled by the service to 74. The ICCS is International Air Transport Association (IATA) Global Cash Management System. It enables airline treasurers to revert their worldwide sales funds into their preferred currencies. This accelerates and improves working capital management and reduces foreign exchange risks.
