- DBS Bank has introduced an e-CNY-based settlement service enabling automatic merchant-client transactions, as part of Singapore Monetary Authority’s asset tokenization trial.
- The novel service aims to facilitate businesses in receiving payments in areas underserved by traditional settlement methods, furthering the reach and use of digital currencies.
As part of Singapore’s pioneering drive into tokenization, DBS Bank has unveiled an e-CNY-based merchant settlement service. The new service, which forms a cornerstone of the city-state’s asset tokenization trial, enables automatic settlement of client payments into corporate customers’ accounts in e-CNY.
An Inclusive Solution for Underserved Regions
DBS Bank targets areas underserved by traditional settlement methods with this service, which provides businesses in such regions an opportunity to receive payments efficiently. Although the service is currently in its early stages, Ginger Cheng, CEO of DBS China, predicts swift uptake of the technology.
Cheng expresses her optimism,
“We received strong interest from several clients for the solution and have completed the first e-CNY collection for a client – a catering company in Shenzhen. This seamless integration of a CBDC collection and settlement method into our clients’ existing payment systems positions their businesses for a digital future where consumers in China use e-CNY for daily activities.”
Aside from facilitating transactions, the network also offers reconciliation services for merchants concerning individual client transactions in e-CNY. This venture forms part of the Singapore Monetary Authority’s extended trial of asset tokenization, which includes major banks and has seen the exchange of tokenized Japanese yen with US dollars in a permissioned Aave pool.
Since its pilot launch in April 2020, the e-CNY’s usage has expanded across 17 provinces and 26 cities in China, demonstrating the potential of digital currencies. The recent appointment of a Communist Party member as the top party official at the People’s Bank of China signals the country’s earnestness in transitioning to digital currencies and potentially reducing dependency on cryptocurrencies.
Enhancing Payment Efficiency
Blockchain technology, with its ability to settle payments faster than traditional methods and operate round-the-clock, enables companies to make payments to vendors precisely when required. Singapore’s recently announced purpose-bound money protocol could offer more flexible arrangements between clients and merchants. Simultaneously, the Monetary Authority of Singapore released new proposals for digital asset exchanges, emphasizing transparency and accountability in customer transactions.