DBS Bank will be rolling out a set of new solutions for its digital yuan users in China. Also called e-CNY, the digital yuan is China’s central bank digital currency and was launched in 2019.
The bank made the formal announcement on July 5 while launching the digital yuan merchant solution, which would enable Chinese businesses to receive payments in terms of the CBDC.
In a media interview, DBS Bank stated that the new solution would enable its clients to receive or collect the digital yuan and then automatically deposit it in their bank deposit accounts. The company also said that the new solution was called a “merchant collection solution” and not a payments solution as merchants collect the amount in terms of CNY.
The new service is expected to offer a range of benefits which include enabling Chinese businesses to collect digital yuan by skipping the manual settlement process. What’s more, is that digital yuan users will be able to use it in underserved regions with limited connectivity.
What adds to the service’s versatility is that it provides reconciliation via itemized digital yuan transactions and merchant reports which will be available through DBS Bank’s online banking service for businesses.
DBS Bank China CEO Ginger Cheng stated that the company has processed its first e-CNY transaction with a catering firm. Cheng said that by integrating the CBDC collection and settlement process into DBS Bank’s existing payment mechanism, the bank can help businesses prepare for a digitally-driven future as more Chinese citizens start using the digital yuan for daily transactions.
DBS Bank: A pro-crypto financial institution
Since its rollout, the Chinese government has aggressively promoted and expanded the digital yuan. In 2022-end, there were approximately 13.6 billion e-CNY — worth around $2 billion — in circulation. The CBDC is accepted as a means of payment in 26 cities and 17 provinces of the country.
The DBS Bank is known for its crypto-friendly approach. In 2019, the Singapore-headquartered bank launched a crypto trading and custody service for its institutional clients. The bank has also been a part of several government-led blockchain initiatives in Singapore. These initiatives include Project Guardian, Project Orchid, and Project Ubin.
China and its CBDC Project
It was initially launched on a pilot basis and is now being used in multiple capacities across the country. Its popularity has also topped that of many new crypto coins.
With the launch of a CBDC, a country can clamp down on the occurrence of frauds where users are duped with misleading schemes claiming unrealistic gains like how to make $100 a day with cryptocurrency or coin trackers suggesting what is the best time of day to buy cryptocurrency.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
