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DBS Bank Steps Up Digital Currency Game With e-CNY Merchant Collection Solution

This move positions DBS as one of the first foreign banks in the country to offer such a service, marking a significant milestone in the bank's ongoing digital innovation journey.

Photo by Mitchell Luo / Unsplash

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Singapore's DBS Bank, the largest bank in Southeast Asia, has made a significant stride in the digital currency landscape by launching an e-CNY merchant collection solution in China.

The newly launched solution enables corporate clients of DBS China to collect payments from their customers in e-CNY, China's central bank digital currency (CBDC). This service automates the settlement of e-CNY directly into the clients' CNY bank deposit accounts, providing a seamless and efficient method for businesses to collect this new form of digital money. This eliminates the need for manual settlement processes, thereby increasing efficiency and reducing the potential for errors.

"By seamlessly integrating a CBDC collection and settlement method into our clients’ existing payment systems, this will help position their business for a digital future where consumers in China use e-CNY for their daily activities," Ginger Cheng, chief executive officer of DBS Bank (China), explained in an announcement on Thursday.

The e-CNY merchant collection solution also leverages the unique capabilities of e-CNY to enable businesses to receive payments digitally in underserved regions with limited internet connectivity. This is a significant development, as it allows businesses in these regions to participate in the digital economy, DBS noted.

In addition to facilitating the collection of e-CNY, the solution also aids in the reconciliation process. It provides consolidated merchant reports with itemised e-CNY transactions, which are accessible via the bank's digital platform for business banking.

Growth of e-CNY

DBS Bank's introduction of the e-CNY merchant collection solution comes as e-CNY usage in China has grown steadily since its pilot launch in April 2020. As of December 2022, there were over 13.6 billion e-CNY in circulation, DBS said, citing China's Ministry of Commerce.

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The CBDC is currently accepted across 26 cities and 17 provinces in China, and its adoption is expected to grow further as the program gradually expands to more regions.

Digital assets innovation

This development is in line with DBS's ongoing efforts to innovate in the digital payments and digital currency solutions space.

The bank has been actively participating in experiments with like-minded industry players, such as Project Orchid led by the Monetary Authority of Singapore (MAS) to develop infrastructure for the issuance of a programmable digital Singapore dollar.

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DBS also participated in the MAS-led Project Guardian to explore the settlement of foreign exchange and government securities transactions using permissioned decentralised finance protocols.


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