China has rolled out its digital RMB interconnection platform with Standard Chartered Bank that is expected to use it in streamlining cross-border payments and other services.
The People’s Bank of China (PBoC) has made significant progress in rolling out the digital Renminbi ( e-CNY) during the past year. With about 26 digital RMB active pilot areas that cover mainland China and cross-border services, the China branch of Standard Chartered Plc (LSE: STAN) has announced that it will access the digital RMB interconnection platform through the City Bank Clearing Services Co., Ltd. As a result, Standard Chartered customers can now access seamless banking services through the use of digital RMB including redemption to cash. Standard Chartered China has become the first international bank to offer e-CNY services amid the mainstream adoption of digital payments through blockchain technology.
According to Zhang Xiaolei, the regional president of Standard Chartered China, the integration of the digital RMB and its banking services will play a crucial role in improving payments and consumption experience. Moreover, the digital RMB that is backed by PBC has minimal friction, thus enabling fast, secure, and cheap transactions.
“…Standard Chartered is optimistic about the development prospects of digital Renminbi and looks forward to continuously expanding the application scenarios, including cross-border merchant payments, trade financing, and supply chain financing, to continue to meet the needs of individual and corporate customers. The partnership will provide high-quality services and inject new momentum into the development of the real economy,” Xiaolei noted.
Worth noting that this is not the first time that Standard Chartered China has been involved with the e-CNY project. In September last year, Standard Chartered participated in the “Multilateral Central Bank Digital Currency Bridge” proof-of-concept test project, which provided cross-border payment settlement services for real transactions and involved real companies through the e-CNY bridge infrastructure.
Closer Look at Digital Renminbi (RMB)
The development and rollout of the digital RMB have aroused different kinds of emotions from the international community. Furthermore, the Chinese government is well known for extreme monitoring of its associated banking institutions, to ensure total compliance and control. The e-CNY is designed to attract international investors and ruthlessly compete with the United States dollar as a global reserve currency. Notably, China accounts for a significant chunk of global economic activities and is at the center stage of the BRICS alliance that is championing de-dollarization.
China has been slowly adopting the cryptocurrency market through Hong Kong and its positive regulatory frameworks. In a bid to ensure a sustainable adoption of digital assets, the PBC has developed the e-CNY in a manner that security is of utmost value while personal privacy cannot be guaranteed. Nonetheless, the country is steps ahead of many other jurisdictions including the United States that are still struggling to pass basic crypto regulations due to differences in political climate.
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