Singapore and China have signed an agreement to work together on a pilot project to use e-CNY, China’s central bank digital currency (CBDC), to streamline cross-border transactions. The project was launched to make it easier for travelers from both countries to make payments abroad.
This innovative move is part of a series of initiatives announced at the 19th meeting of the Joint Council for Bilateral Cooperation (JCBC) in Tianjin. The pilot project is also a continuation of the digital finance cooperation in 2020 through a Memorandum of Understanding (MOU) between the Monetary Authority of Singapore (MAS) and the Digital Currency Institute of the People's Bank of China (PBOC).
This is aimed at enhancing collaboration in digital finance and capital markets in both countries. In addition, these initiatives are a move by Beijing to promote the adoption of the digital yuan beyond its borders.
To strengthen bilateral ties, the two countries also agreed to implement a 30-day visa-free travel policy, one of 24 agreements signed during the event.
In a statement, the Monetary Authority of Singapore said its collaboration with the Digital Currency Institute of the People's Bank of China (PBOC) aims to enable travelers from both countries to use the digital version of the Chinese currency in tourist spending transactions. The program is expected to increase travelers' convenience when making purchases while traveling abroad.
Beijing's digital currency pilot project began in 2019. Beijing is testing the use of e-CNY outside of Chinese territory, as the internationalization of the yuan becomes increasingly urgent amid heightened geopolitical tensions.
Former PBOC Governor Yi Gang said e-CNY transactions totaled 950 million yuan (US$133 million) in June. This is a significant increase from the cumulative value of 1.8 trillion yuan, compared to 100 billion yuan in August 2022, as revealed by Yi Gang in July this year.
