Foreign Banks Join CBDC Testing in China
Date: 2023-12-01 Author: Dima Zakharov Categories: BUSINESS, IN WORLD
Foreign Banks Embrace CBDC Pilot Trials in China
Recent reports from local media indicate that Hang Seng Bank and Taiwan's Fubon Bank have incorporated the digital yuan (CBDC) into their banking frameworks.
All four foreign banks have authorized the transfer and withdrawal of digital yuan. For instance, Hang Seng Bank enables clients to link debit cards within the official e-CNY app and purchase digital yuan. They can replenish their digital yuan wallet via the Hang Seng China Mobile Banking app.
HSBC has similarly introduced analogous functionalities for retail use of e-CNY for its clients.
Foreign banks are increasingly participating in pilot trials of CBDC in China. Notably, Fubon Bank allows users to deposit electronic yuan through mobile banking and spend CBDC using their bank cards. The bank asserts its commitment to exploring the applications of CBDC e-CNY in cross-border trade, smart contracts, cross-border payments, and supply chain financing.
Sun Yueh-sen, Vice Chairman and President of Hang Seng China, stated that the bank plans to use the e-CNY CBDC pilot project to create new consumption scenarios, enrich service systems, and stimulate business opportunities.
Standard Chartered announced its experimentation with CBDC e-CNY in areas such as "cross-border trade payments, trade financing, and supply chain financing."
It's worth noting that the digital yuan CBDC was initially used in an oil transaction where PetroChina International acquired 1 million barrels of oil using CBDC.
According to China Daily, in the first three quarters of 2023, the use of yuan in cross-border settlements surged by 35% compared to the same period last year, reaching $1.39 trillion. Additionally, the People's Bank of China (PBOC) and the UAE signed a Memorandum of Understanding to strengthen cooperation in the CBDC field.
Chinese authorities are making significant efforts to promote the digital yuan domestically and internationally. The government aims to leverage the digital yuan to enhance its influence globally and reduce the dominance of the dollar.
