Southeast Asia's Premier Bank Debuts Payment Support for China's Digital Yuan

Southeast Asia’s Premier Bank Debuts Payment Support for China’s Digital Yuan

Updated: 06 July 2023

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DBS Bank, recognized as Southeast Asia’s leading bank, and its mainland affiliate, DBS Group China, are extending support for the Chinese digital yuan (e-CNY). By launching a novel payment mechanism for the digital yuan, the Singapore-based bank will broaden the range of businesses capable of receiving payments in Beijing’s central bank digital currency (CBDC).

DBS China’s new payment system will facilitate transactions in e-CNY for businesses, enabling them to collect customer payments. Successful settlements will then be directly transferred into a conventional bank account. The effectiveness of this process was demonstrated by an e-CNY transaction with a catering company in Shenzhen, as reported in the company’s press release.

The head of DBS China, Ginger Cheng, expressed optimism that the introduction of this system would spur Chinese clients’ use of e-CNY. Cheng emphasized his firm’s active involvement in bolstering China’s financial market innovation.

China‘s e-CNY, launched in 2019, has seen a steady rise in its use within the nation’s economy. The Ministry of Commerce states that by the close of 2022, the digital currency, in circulation in 17 provinces across 26 Chinese regions, had reached 13.6 billion CNY. As a CBDC, the e-CNY, managed by China’s central bank, the People’s Bank of China, is legally recognized and in the wake of an extensive crackdown on cryptocurrency trading and mining, its acceptance has grown.

Hong Kong Remains a Leader in Cryptocurrency Adoption and Promotion

While once China was the world’s foremost crypto mining nation, stricter regulations have forced operators to relocate overseas or operate covertly. Despite the stringent measures on the mainland, Hong Kong has demonstrated a more accommodating stance towards cryptocurrencies. Last month, Hong Kong laid out guidelines for cryptocurrency firms wishing to operate within its jurisdiction. Requirements included proving that exchange executives possess relevant experience in a regulated environment and marketing products to Hong Kong residents.

DBS Bank‘s involvement in the expansion of China‘s digital currency marks yet another stride into the realm of digital assets. Since 2021, DBS has offered a crypto custody service that permits its high-net-worth clients to secure tokens like Bitcoin and Ethereum at the bank. Additionally, in May 2022, DBS partnered with JP Morgan on Project Guardian, an initiative to pilot a transaction settlement platform on a public blockchain.