Singapore Firm Strikes Cross-border Digital Yuan Deal with Chinese Bank

A Singaporean payments firm has sealed a “cross-border” digital yuan cooperation deal with a major Chinese bank, in another breakthrough for the CBDC.

Per the Shanghai Securities News, the deal was concluded by Thunes, a global payment infrastructure provider, and the China Construction Bank (CCB).

The CCB is a state-owned financial institution that comprises one of China’s “big four” commercial banks.

Thunes, headquartered in Singapore, is a B2B payments provider to customers such as Uber and Deliveroo.

The deal will see Thunes and the CCB “cooperate to explore digital yuan cross-border [settlement] and payment solutions.”

It will allow parties to make digital yuan settlements in “export-based cross-border e-commerce” and a range of “remittance scenarios.”

Singaporean Cross-border Digital Yuan Deal: Significant for China?

Before 2023, Chinese officials had insisted that the e-CNY was primarily a domestic project.

They said it was mainly intended as a digital cash alternative for retail payments.

But since the turn of the year, the central People’s Bank of China (PBoC) and its partners have changed their messaging, with more talk of “cross-border” uses of the coin.

An increasing number of “cross-border” pilot projects have materialized in Hong Kong and neighboring Mainland Chinese cities.

More recently, the PBoC has established an e-CNY link to Hong Kong’s FPS payment platform.

And during the recent Asian Games in Hangzhou, the PBoC and its partners launched a range of e-CNY services for foreign students and overseas visitors to China.

However, any sort of expansion to the Singaporean market – or other markets in Thunes’ network – would mark a major departure for the PBoC.

The move could potentially open the door for overseas e-commerce platforms to sell goods to Chinese buyers who pay in CBDC tokens.

The media outlet added that the deal will let individuals use the e-CNY to remit funds to students.

It claimed that the new solution was being developed “under the guidance of the” Digital Currency Research Institute, the PBoC’s CBDC arm.

The companies will work on an initial pilot involving a select group of customers, with a wider rollout to follow at an unspecified later date.

A Thunes official said that the deal would help it provide its clients with “more interactive multi-currency and cross-border settlement services.”

In June, Thunes announced the launch of a Mainland China branch in Beijing, to “better support its business development” in the nation.

Chinese allies such as Russia have previously claimed that their own CBDC projects may be “compatible” with the e-CNY.

Beijing has, however, thus far remained tight-lipped on the matter.