Southeast Asia’s largest bank is launching a new payment solution for China’s digital yuan (e-CNY), expanding the number of businesses who can receive payments in Beijing’s central bank digital currency (CBDC). 

DBS Group China, the mainland subsidiary of Singapore-based DBS Bank, announced that it has launched a new payment system to support e-CNY. The solution allows businesses to collect customer payments in e-CNY, and automatically make settlements that are then directly deposited  into a fiat bank account. A catering business in Shenzhen was one of the first clients to be onboarded for e-CNY payments, according to a press release from the company. 

Ginger Cheng, the chief executive officer of DBS China, said that the new system will help the bank's clients use the CBDC. With this next step, Cheng added that her company was "actively supporting the development of China’s financial market innovation."

AD

Since launching the e-CNY in 2019, China has steadily expanded its use across its economy. Today, the CBDC is being used in 26 Chinese regions across 17 provinces, and saw 13.6 billion CNY in circulation by the end of 2022, according to China's Ministry of Commerce

Being a CBDC, China’s digital currency is considered legal tender and is operated by its central bank, the People’s Bank of China. The embrace of the digital yuan also comes against the backdrop of years-long crackdown on cryptocurrency trading and mining. At one point, China was the largest crypto mining nation in the world, but operators have been driven overseas or underground as authorities increased their pressure. 

At the same time, Beijing has tacitly allowed Hong Kong to set new rules around cryptocurrency that are more accommodating than on the mainland. 

Last month, Hong Kong issued guidelines for cryptocurrency firms looking to operate on its territory that included a need for executives working for exchanges to prove they have relevant experience to operate in a regulated setting, and to actively market products to Hong Kong residents. 

This is just the latest foray into digital assets for DBS Bank. Since 2021, DBS has operated a crypto custody service that allowed its high-net worth customers to store tokens like Bitcoin and Ethereum with the bank. SBA has also worked together with JP Morgan to pilot a transaction settlement platform on a public blockchain in May 2022, known as Project Guardian.

AD

Editor's Note: Updated to reflect that DBS clients can receive, but not make, e-CNY payments and clarify that DBS has not partnered with the Chinese government.

Stay on top of crypto news, get daily updates in your inbox.