DBS Bank Enables First e-CNY Transaction for in China

DBS Bank, known for its crypto-friendly approach, has successfully facilitated the inaugural e-CNY transaction for corporate clients. The transaction involved a catering company in Shenzhen and marks a significant milestone in the collaboration between DBS Bank and mainland China for the development of a new payment solution for the digital yuan, also known as e-CNY.

On July 5, DBS Bank China officially announced the launch of its e-CNY merchant solution. This groundbreaking solution allows businesses in mainland China to receive payments in the central bank digital currency (CBDC). Corporate clients of DBS Bank China can now seamlessly collect payments from their customers in e-CNY and automatically settle them directly into their CNY bank deposit accounts.

The introduction of this service brings numerous benefits. Businesses can now collect CBDC without the need for manual settlement processes, streamlining their operations. Moreover, the solution caters to merchants operating in underserved regions with limited internet connectivity, enabling them to receive payments conveniently.

Additionally, the solution provides efficient reconciliation through consolidated merchant reports. These reports, available via DBS’ digital platform for business banking, provide detailed information on itemized e-CNY transactions, ensuring transparency and ease of tracking.

Ginger Cheng, CEO of DBS Bank China, expressed excitement about the successful completion of the first e-CNY transaction involving a catering company in Shenzhen. Cheng emphasized that integrating a CBDC collection and settlement method into clients’ existing payment systems will position their businesses for a digital future where Chinese consumers embrace e-CNY for their daily activities. Furthermore, he reiterated the company’s commitment to improving user experience and actively supporting innovation in China’s financial market.

Lim Soon Chong, the head of global transaction services at DBS Bank, hailed the new CBDC service as a remarkable achievement in the firm’s ongoing efforts to facilitate instant and frictionless 24/7 payments. Chong further expressed enthusiasm about exploring additional digital payment solutions, including cross-border CBDC payments, as part of future endeavors.

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In other related news, the city of Jinan in China recently started accepting CBDC payments for bus rides, highlighting the increasing acceptance and adoption of the digital yuan throughout the country. Since its launch in 2019, the digital yuan has gained significant traction, with approximately 13.6 billion e-CNY in circulation, equivalent to around $2 billion, by the end of 2022. The CBDC is already accepted in 26 cities and 17 provinces in China, with plans to expand its adoption to more regions gradually.

While DBS Bank actively supports initiatives such as e-CNY, it is also recognized for its pro-crypto stance. In 2020, the Singaporean megabank introduced cryptocurrency trading and custody services tailored to institutional clients. The company’s involvement in the crypto industry proved advantageous, with an 80% surge in Bitcoin trading volumes reported in 2022.

Moreover, DBS Bank has actively participated in various government-led blockchain initiatives in Singapore, including Project Orchid, Project Guardian, and Project Ubin. These initiatives underscore the bank’s commitment to embracing technological advancements and contributing to the future of finance.