DBS Bank, recognized for its cryptocurrency-friendly approach, has executed its inaugural e-CNY transaction for corporate clientele, involving a catering business based in Shenzhen.
DBS, known for its positive stance towards cryptocurrencies, is debuting new facilities for its patrons in mainland China pertaining to the digital yuan or e-CNY.
DBS Bank China formally announced on July 5 the inauguration of their e-CNY merchant solution, enabling mainland businesses to accept payments in the form of China’s central bank digital currency (CBDC).
DBS revealed to Cointelegraph that this novel service would empower DBS clients in mainland China to receive or accumulate e-CNY and have it automatically settled into their CNY bank deposit accounts. The firm refers to this service as a “merchant collection solution” as opposed to a payment solution, given that the merchant “collects” the concluding amount in CNY in their bank deposit account.
DBS’ solution is architected to provide several advantages, enabling businesses to gather CBDC “without needing to engage in manual settlement procedures,” as stated in the announcement. The tool also encompasses e-CNY’s capabilities, allowing users to accept payments in underprivileged regions with limited internet access.
Additionally, the solution furnishes reconciliation via consolidated merchant reports with detailed e-CNY transactions accessible through DBS’ digital platform for business banking.
Ginger Cheng, DBS Bank China CEO, stated that the company has finalized the initial e-CNY transaction involving a Shenzhen-based catering business. She remarked:
“By seamlessly incorporating a CBDC collection and settlement method into our clients’ existing payment systems, we aim to position their business for a digital future where consumers in China utilize e-CNY for their everyday transactions.”
She added that the development exemplifies the firm’s dedication to enhancing user experience while “actively supporting the progression of China’s financial market innovation.”
Lim Soon Chong, head of global transaction services at DBS Bank, indicated that the new CBDC service signifies another landmark in the company’s endeavors to facilitate immediate and effortless 24/7 payments. “We anticipate building on this launch to investigate new digital payment solutions, such as cross-border CBDC payments,” the executive added.
Since the unveiling of the CBDC in 2019, China has made notable strides in promoting and expanding the digital yuan. The country’s central bank reports that there were 13.6 billion e-CNY in circulation, or approximately $2 billion by the end of 2022. The CBDC is currently accepted across 26 cities and 17 provinces in China, with the expectation of further scaling as the program progressively extends to more regions.
DBS Bank is renowned for its pro-crypto stance. In 2020, the Singaporean mega bank introduced cryptocurrency trading and custody services for institutional clients. The firm reportedly belonged to a handful of companies worldwide that benefitted from significant downturns in the crypto industry, witnessing an 80% surge in Bitcoin BTC $30,466 trading volumes in 2022.
DBS has also been involved in several government-related blockchain initiatives in Singapore, including Project Orchid, Project Guardian, and Project Ubin.