Standard Chartered joins China’s CBDC pilot testing

November 29, 2023

By Sharan Kaur Phillora

Standard Chartered, a leading British multinational bank, has recently embarked on a groundbreaking venture by participating in the pilot testing of China’s e-CNY, the digital yuan central bank digital currency (CBDC). This notable move positions Standard Chartered as one of the first foreign banks to be involved in such trials within China​​​​.

Here’s what we know:

The bank’s participation in the e-CNY CBDC pilot testing program is a significant step in exploring the potential of digital currencies in the global financial landscape. Standard Chartered China aims to offer new business-to-business (B2B) trade services related to the e-CNY. 

These services encompass minting and redemption processes, which will be conducted through the City Bank Clearing Service. This integration signifies a new era in international banking, reflecting the growing influence and integration of digital currencies in traditional banking systems​​.

Furthermore, Standard Chartered’s involvement in the e-CNY CBDC pilot testing extends to exploring cross-border payments and trade financing. This exploration is pivotal, considering the increasing need for efficient and secure digital transaction methods in global commerce. 

The bank has previously been involved in a CBDC bridge project in Hong Kong and released a report in May 2023 on the application prospects of CBDCs. This report, jointly released with PricewaterhouseCoopers China, delves into the implications and potential applications of CBDCs in sectors like retail, trade, and supply chain finance​​.

The e-CNY, since its introduction in 2020, has shown impressive growth and adoption rates. Transactions using e-CNY have exceeded 1.8 trillion yuan (approximately $253.6 billion), and the number of wallets has surged to 120 million. This rapid adoption and the scale of transactions underscore the significant impact and potential of digital currencies in the modern financial ecosystem​​.

Standard Chartered’s decision to join the e-CNY CBDC pilot testing is a testament to the bank’s commitment to innovation and its foresight in recognizing the evolving landscape of global finance. This partnership not only benefits Standard Chartered in gaining a foothold in the emerging digital currency market but also contributes to the broader understanding and development of digital currencies in the global financial arena. 

As digital currencies continue to gain momentum, such collaborations between traditional banking institutions and digital currency initiatives are likely to become more prevalent, shaping the future of banking and finance.

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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