The Chinese arm of BNP Paribas has partnered with the Bank of China to launch a digital yuan wallet to support its corporate clients for both offline and online payments. China’s central bank digital currency (CBDC) is referred to as eCNY locally.
Only a few major banks, including the four large state-owned banks, are directly connected to the main CBDC network. So to access the CBDC, all other banks must work via these institutions. The wallet will also support supply chain finance applications and payments to utility companies.
“This collaboration can supplement the Bank’s offline payment collection capabilities and further optimize our clients’ account structure,” said CG Lai, BNP Paribas China CEO, according to Finews.
One of the most significant aspects is the potential to use the wallet for the MBridge project, a cross border CBDC platform developed by the central banks of China, Hong Kong, Thailand and the UAE in association with the BIS. Unlike many other platforms that were just experiments, in the case of MBridge, the organizations are working towards production.
Back in 2021, the Bank of China Hong Kong outlined how MBridge could be used to settle transactions between eTradeConnect, the Hong Kong DLT-based trade finance network, and the People’s Bank of China Trade Finance Platform (PBCTFP). Using the digital yuan in this context has been in the works since 2020. BNP Paribas is also a member of eTadeConnect.