DBS Bank China has announced that it is collaborating with mainland China to develop a new payment solution for the digital yuan, also known as e-CNY. The bank has launched the e-CNY merchant solution, which enables mainland businesses to accept payments in the central bank digital currency.
With the new service, corporate clients of DBS Bank China can collect payments from their customers in e-CNY and settle them directly into their CNY bank deposit accounts. This eliminates the need for manual settlement processes, providing businesses with a seamless and efficient solution. The tool also includes features that allow merchants to receive payments in underserved regions with limited internet connectivity.
The solution offered by DBS Bank China also provides reconciliation through consolidated merchant reports, which include itemized e-CNY transactions. These reports are available via DBS’ digital platform for business banking, making it easier for businesses to track and manage their payments.
Ginger Cheng, the CEO of DBS Bank China, stated that the company has already completed the first e-CNY transaction with a catering company in Shenzhen. He emphasized that integrating a CBDC collection and settlement method into clients’ existing payment systems will help position their businesses for a digital future, where consumers in China will use e-CNY for their daily activities. Cheng also expressed the firm’s commitment to improving user experience and supporting the development of China’s financial market innovation.
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Lim Soon Chong, the head of global transaction services at DBS Bank, described the new CBDC service as another milestone in the bank’s efforts to enable instant and frictionless 24/7 payments. He also expressed the bank’s interest in exploring new digital payment solutions, including cross-border CBDC payments.
China has made significant progress in promoting and expanding the digital yuan since its launch in 2019. According to the country’s central bank, there were 13.6 billion e-CNY in circulation, equivalent to about $2 billion, by the end of 2022. The CBDC is currently accepted in 26 cities and 17 provinces in China, with plans to expand its adoption to more regions in the future.
While DBS Bank supports centralized finance initiatives like e-CNY, it is also known for its pro-crypto stance. In 2020, the bank launched cryptocurrency trading and custody services for institutional clients, becoming one of the few companies in the world to benefit from the massive growth in the crypto industry. In 2022, DBS Bank saw an 80% spike in Bitcoin (BTC) trading volumes.
In addition to its involvement in the development of e-CNY, DBS Bank has participated in various government-related blockchain initiatives in Singapore. These include projects like Project Orchid, Project Guardian, and Project Ubin, which aim to explore the potential of blockchain technology in different sectors.
Overall, the collaboration between DBS Bank China and mainland China on the development of a payment solution for e-CNY highlights the growing importance and acceptance of digital currencies by traditional financial institutions. As more countries and banks explore CBDCs, it is likely that we will see further innovations and partnerships in the blockchain and cryptocurrency space.
