Blockchain for Banking News

DBS launches digital yuan for merchants, eyes cross border CBDC

digital yuan currency cbdc eCNY RMB renminbi

The Chinese subsidiary of Singapore’s DBS Bank has launched a merchant collection solution for China’s e-CNY central bank digital currency (CBDC).

Only a small number of Chinese banks have direct access to the digital yuan central bank system, with others working indirectly. In this case DBS is working with UnionPay Merchant Services. UnionPay is the state owned organization that is the main provider of bank card services in China. Its role is similar to Visa and Mastercard.

“We received strong interest from several clients for the solution since its launch, and we are pleased to have completed the first e-CNY collection for a client – a catering company in Shenzhen,” said Ginger Cheng, CEO of DBS Bank (China).

In May, another foreign bank BNP Paribas China launched a digital yuan wallet.

Another DBS executive, Lim Soon Chong added, “We look forward to building on this launch to explore new digital payment solutions, such as cross-border CBDC payments.”

The most recent e-CNY statistics are from the Ministry of Commerce from the end of last year putting the amount in circulation at 13.61 billion yuan ($1.9 bn). The central bank last issued figures for August 2022, focusing on transaction volumes and values. Those numbers can be expected to surge soon as the CBDC is rolled out more broadly and into financial markets including for commodities settlement.

DBS and digital currency

Meanwhile, DBS Bank was keen to highlight its innovative track record when it comes to digital currency. Alongside Temasek and JP Morgan, it is a co-founder of Partior, the blockchain-based network for multicurrency interbank payments. 

It has also been involved in numerous trials with the Monetary Authority of Singapore (MAS), including Project Ubin which led to the founding of Partior. More recently it has participated in Project Guardian which trialed permissioned DeFi on public blockchain and Project Orchid for the programmability of a retail Singapore Dollar.

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