Twenty-six financial institutions signed Cross-border e-CNY Transfer Services direct participant agreements with e-CNY Center International Co in Shanghai on Tuesday, becoming the first group to gain access to CBETS, a cross-border blockchain-based infrastructure service platform designed to support the international use of the digital yuan.
Developed and operated by e-CNY Center International Co, the platform enables participating institutions to connect with the payment and digital fiat currency systems of monetary authorities in different jurisdictions. Direct access to the platform also allows institutions to utilize its round-the-clock smart digital payment solutions that operate both on-chain and off-chain.
The first batch of participants includes Standard Chartered Bank (China) Ltd, along with overseas branches of multiple Chinese banks located in Thailand, Singapore, Laos, the United Arab Emirates, Qatar, Brazil, and the Hong Kong and Macao special administrative regions.
“Digital infrastructure development is a crucial pillar in advancing the internationalization of the RMB,” said Jerry Zhang, Standard Chartered’s global head of RMB commercialization and global head of banks and broker dealers. “At Standard Chartered, we recognize the transformative potential of digital currencies and are fully committed to contributing to the development of the digital RMB ecosystem.”
Rene Michau, global head of digital assets at Standard Chartered, said: “We are committed to becoming a bridge between the global digital asset economy and traditional finance. CBDC (central bank digital currency) is an important infrastructure in the digital economy, and the People’s Bank of China is a pioneer among global central banks in developing and promoting CBDC. The signing of the CBETS direct participant agreement showcases our proactive move to participate in the development of CBDC and the digital RMB. It also reinforces our role as a super connector across borders, markets and client segments, bringing our cross-border strategy to life.”
Bank of Communications’ Hong Kong branch, Hong Kong subsidiary, Macao branch and Brazil subsidiary are also among the first batch of direct participants.
BOCOM said the collaboration will further enhance its global e-CNY operational footprint, optimize its digital payment services for cross-border trade and daily transactions, help build an efficient and inclusive cross-border payment system, and steadily advance the internationalization of the renminbi.
In addition, BOCOM has also partnered with a Malaysian institution to launch an e-CNY solution focused on the payment needs of foreign visitors to China. Leveraging the CBETS system and its operational standards, the solution enables non-resident individuals to make mobile payments in China using overseas e-wallets. By streamlining the process for foreign customers to use the digital yuan in compliance with regulations, it effectively enhances the convenience of cross-border payments, thereby substantially deepening financial connectivity and economic and trade exchanges between China and Malaysia.
Fu Yifu, a special researcher at Jiangsu Su Merchants Bank, said once multiple banks gain access to CBETS, cross-border payments will see substantial improvements in the areas of efficiency, cost, compliance and interconnectivity.
In terms of efficiency, the platform leverages the central bank direct connect mechanism and distributed ledger technology to reduce settlement times — which previously took several days — to a matter of seconds. In terms of cost, peer-to-peer clearing bypasses the multiple layers of fees charged by correspondent banks, resulting in a significant reduction in transaction fees. Regarding compliance, smart contracts ensure that the entire transaction process is verifiable and traceable, effectively mitigating money laundering risks, Fu said.
Looking ahead, he expects that e-CNY Center International Co will attract more eligible commercial banks, financial infrastructure providers, and payment service providers to join CBETS. The platform’s use will also extend into more complex areas such as investment and financing, supply chain finance, and digital assets. In the future, CBETS is expected to connect with the central bank digital currency systems of more countries and regions.
Tanks to chinadaily.com.cn
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