Singapore, China to Begin Piloting Digital Currency in Tourism Spending Push

Singapore’s regulatory body the Monetary Authority of Singapore (MAS)  plans to begin piloting the digital currency “E-CNY” – also known as the digital yuan, in collaboration with China to encourage tourism spending.

The two countries first signed a Memorandum of Understanding to work together back in 2020. No timeline was given for when the digital currency would be trialled.

The digital currency project is developed by the People’s Bank of China, MAS and the Digital Currency Institute of the People’s Bank of China– the digital currency will allow travellers from both countries to use E-CNY for tourism spending in both Singapore and China, said the regulatory body in a press release.

The discussions around the E-CNY took place at the 19th Joint Council for Bilateral Cooperation in Tianjin earlier today – the event was co-chaired by Singapore’s Deputy Prime Minister and Minister for Finance, Lawrence Wong, and the People’s Republic of China Executive Vice Premier of the State Council, Ding Xuexiang.

What is the “E-CNY”

The digital currency is China’s digital version of the yuan and it is not a decentralized currency – It is designed mainly for domestic retail payments at present. The new digital currency meets the public’s demand for cash in the digital economy era, according to the BIS – it will support the development of retail payment infrastructures and aims to improve payments.

Over the years China has been trailing the currency domestically – eventually, the country plans to explore pilot cross-border payment programmes.

Singapore Sees No Future For Private Crypto 

Recently Singapore’s central bank’s managing director, Ravi Menon, emphasized that private cryptocurrencies falling short of fundamental financial service tests will eventually fade from the monetary scene – He outlined his vision for the future monetary system, highlighting three key components: central bank digital currencies (CBDCs), tokenized bank liabilities, and well-regulated stablecoins.

“It has been a fruitful year of financial cooperation between Singapore and China. MAS welcomes the new initiatives in digital finance and capital markets connectivity, as these will catalyse new financial flows between our financial centres, and deepen trade and economic relations between our economies,” said Leong Sing Chiong, Deputy Managing Director, MAS, in a press release.

The two countries also announced they would launch an exchange-traded funds (ETF) link between the Singapore Exchange (SGX) and Shanghai Stock Exchange (SSE).

In terms of travel, the two countries Singapore and China will put in place a 30-day mutual visa exemption agreement early next year — as the two countries agreed to further upgrade a trade pact between them, reports Reuters.