Singaporean Payments Firm Strikes Cross-Border Digital Yuan Deal with Chinese Bank
A major breakthrough has been achieved for China’s central bank digital currency (CBDC) as a Singaporean payments firm, Thunes, has signed a cooperation deal with the China Construction Bank (CCB). The CCB is one of China’s “big four” commercial banks and the collaboration will focus on exploring cross-border settlement and payment solutions using the digital yuan. Thunes, headquartered in Singapore, provides B2B payment infrastructure to companies like Uber and Deliveroo. This partnership will enable digital yuan settlements in export-based cross-border e-commerce and various remittance scenarios.
Significance of the Singaporean Cross-Border Digital Yuan Deal
Prior to 2023, Chinese officials had emphasized that the e-CNY was primarily intended for domestic use as a digital cash alternative for retail payments. However, there has been a shift in messaging this year, with increased focus on “cross-border” applications of the digital currency. Pilot projects involving cross-border transactions have already been launched in Hong Kong and other Mainland Chinese cities. Additionally, an e-CNY link to Hong Kong’s FPS payment platform has been established by the People’s Bank of China (PBoC).
The recent Asian Games in Hangzhou witnessed the launch of various e-CNY services for foreign students and overseas visitors to China. The collaboration between Thunes and CCB opens up possibilities for expanding into markets like Singapore, potentially allowing overseas e-commerce platforms to sell goods to Chinese buyers who can pay using CBDC tokens. The development of this solution is being guided by the Digital Currency Research Institute, the CBDC arm of the PBoC. The initial pilot will involve a select group of customers, with a wider rollout planned for the future.
Hot Take: A Major Step Towards Internationalizing the Digital Yuan
The partnership between Thunes and CCB marks a significant milestone in the internationalization of China’s digital yuan. By enabling cross-border settlements and payments using the CBDC, this collaboration has the potential to revolutionize global e-commerce transactions involving Chinese buyers. The e-CNY’s expansion beyond domestic use demonstrates China’s ambitions to establish its digital currency as a prominent player in the international financial landscape. As more cross-border pilot projects are implemented and partnerships with foreign companies are forged, the digital yuan’s influence is expected to grow, challenging traditional payment systems and shaping the future of global finance.
By
By
By