Standard Chartered is First Foreign Bank to Join China e-CNY Pilot
Standard Chartered China is offering new B2B trade services related to China’s e-CNY central bank digital currency (CBDCs). These include minting and redemptions that will work through the City Bank Clearing Service, the bank announced on Monday.
Standard Chartered is one of the first foreign banks to become involved in the Chinese CBDC project, arguably the world’s most advanced central bank effort. The move comes after central bank official Li Xin launched a new B2B digital renminbi platform to improve cross-border functions, including order information matching and foreign exchange compliance.
China Wants Businesses to Drive e-CNY
At the same event last Friday, Wu Gang, the vice president of the central bank branch in Zhejiang province, also effected an initiative to increase the use of the CBDC among small-to-medium sized enterprises. Earlier this year, DBS Singapore launched a pilot to test the exchange of e-CNY between merchants and clients on its own network.
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President Xi Jinping previously favored a tokenized currency to challenge the US dollar in international trade. The idea gained media traction amid reports of the US dollar’s faltering dominance and fiscal challenges this year. An alternative trade currency was also mentioned at a meeting of the leaders of Brazil, Russia, India, China, and South Africa in August.
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CBDC Could Accrue Censorship
So far, the People’s Bank of China has conducted pilots for its CBDC in 26 cities. As of the end of June, these trials had been responsible for $249.3 billion in transactions.
In October, the foreign exchange regulator hinted that programmable money could help improve the implementation of monetary policy. The government could embed an expiry date in the money or limit where it could be spent.
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