Crypto-friendly DBS Bank Introduces Digital Yuan Payment Solution

DBS Bank China has made an official announcement on July 5, revealing its collaboration with mainland China to introduce a new payment solution for the digital yuan, also known as e-CNY.

The newly launched e-CNY merchant solution will enable businesses in mainland China to receive payments in the central bank digital currency (CBDC), facilitating the adoption of digital yuan payments.

Corporate clients of DBS Bank China will have the opportunity to collect payments from their customers in e-CNY and experience automated settlement of the digital currency directly into their Chinese yuan (CNY) bank deposit account.

The aim of DBS Bank’s solution is to provide several benefits, including the ability for businesses to collect CBDC without the need for manual settlement processes. The solution also incorporates features that allow merchants to receive payments in underserved regions with limited internet connectivity.

Furthermore, the solution offers reconciliation through consolidated merchant reports, providing detailed information on e-CNY transactions accessible through DBS’ digital platform for business banking.

According to Ginger Cheng, CEO of DBS Bank China, the company has already completed the first e-CNY transaction involving a catering company in Shenzhen. Cheng emphasized the significance of seamlessly integrating CBDC collection and settlement methods into clients’ existing payment systems, positioning their businesses for a digital future where e-CNY is used for daily activities by consumers in China.

He further expressed the firm’s commitment to enhancing user experience and actively supporting the development of China’s financial market innovation.

Lim Soon Chong, Head of Global Transaction Services at DBS Bank, highlighted that the introduction of the new CBDC service marks another milestone in the bank’s efforts to enable instant and frictionless 24/7 payments. Chong also expressed the bank’s eagerness to explore additional digital payment solutions, such as cross-border CBDC payments, building upon the current launch.

China has been making significant strides in promoting and expanding the digital yuan since its launch in 2019. The country’s central bank reported that there were 13.6 billion e-CNY in circulation, equivalent to approximately $2 billion, by the end of 2022. The digital yuan is currently accepted in 26 cities and 17 provinces in China, with plans for further expansion to more regions.

While supporting centralized finance initiatives like the e-CNY, DBS Bank has gained recognition for its pro-crypto stance. In 2020, the Singaporean megabank introduced cryptocurrency trading and custody services for institutional clients. It was reported that DBS Bank experienced an 80% surge in Bitcoin trading volumes in 2022, positioning itself among the few companies worldwide to benefit from significant fluctuations in the crypto industry.

In addition to its involvement in expanding China’s CBDC ecosystem, DBS Bank has actively participated in various government-led blockchain initiatives in Singapore, including Project Orchid, Project Guardian, and Project Ubin.

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