The leading Southeast Asian Bank confirmed it facilitates its customers to execute e-CNY payments. The bank unveiled a new payment solution in support of China’s efforts to introduce digital yuan (E-CNY).
The move by the leading bank is set to expand the businesses receiving payments within China’s central bank digital currency (CBDC) ecosystem.
The news of expanded support for e-CNY emerged from the DBS Group China announcement that it was launching a new support system with a unique infrastructure to support e-CNY. The system is designed to facilitate businesses in collecting payments made by clients in e-CNY.
DBS Facilitating eCNY Expansion in China
The mainland subsidiary of DBS Bank projects the new system to facilitate the automatic settlement of eCNY-based payments. The receipts are remitted into the fiat bank account. The viability of the new system is featured in a successful test involving the eCNY collection from a Shenzhen-based catering business.
DBS China chief executive Ginger Cheng restated that the new system will facilitate the expansion of eCNY usage among Chinese customers. With the addition of the new system, Cheng is confident that DBS would actively support development efforts undertaken in China’s financial market.
The launch of the support system is set to benefit eCNY expansion in the country since its establishment in 2019. The successful piloting in the catering entity affirms that China’s CBDC is viable. In particular, any usage expanded to 26 regions within 17 provinces. By December 2022, over 13.6 billion digital yuan were circulating, as illustrated by the Ministry of Commerce.
Despite the crackdown on crypto, the digital yuan is a legalized tender. Its operation rests upon the scope of the central bank. As such, the People’s Bank of China is the sole authority tasked with oversight. The expanding usage coincides with a period in which China intensified its war against cryptocurrency trading and mining activities.
The crackdown eliminated the one-time world’s largest crypto-mining territory. Most operators exited the country or operated underground, citing increased scrutiny by the authorities.
Beijing Apparent Support for Crypto Industry in Hong Kong
Beijing’s mixed-bag handling of digital assets is evident in allowing crypto to thrive in Hong Kong. The rules in the administrative region are accommodating compared to the aggressive stance exhibited in mainland China.
Revisiting Hong Kong’s recent activities reveals new guidelines compelling crypto firms seeking registration to demonstrate relevant experience within a regulated ecosystem.
The new guidelines mandate executives working for the crypto exchanges to possess relevant experience operating within the regulated setting. The guideline considers such experience mandatory to market their digital products to Hong Kong residents actively.
DBS Expanding Scope in Digital Assets
Creating a system to support digital yuan by DBS underscores the bank’s growing presence in the crypto space. DBS Bank has, in 2021, unveiled the crypto custody service allowing high net worth customers to store Bitcoin and Ethereum tokens.
The DBS Bank partnered with JPMorgan and SBI Digital Asset Holdings in piloting a transaction settlement exploring the benefits of embracing decentralized finance (DeFi) protocols leveraging tokenized real-world assets. It featured in the JPMorgan-led pilot program in May 2022, identified as Project Guardian to assess transaction settlement platforms hosted on the public blockchain.
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