DBS has launched a new solution that allows merchants in China to collect payments using e-CNY, the country's central bank digital currency (CBDC). The banking giant has also completed the first transaction for a client, a catering company in Shenzhen, on the new platform.

Additionally, the Singapore-based banking and financial services firm outlined some the benefits of the new service in an announcement today (Wednesday).

E-CNY Merchant Collection Solution

The e-CNY merchant collection solution lets merchants settle payment transactions automatically into their e-CNY bank deposit accounts. The service works even with limited internet connectivity and enables merchants to reconcile their financial reports. The reports can be accessed through the bank's digital platform, DBS IDEAL, DBS explained.

"By seamlessly integrating a CBDC collection and settlement method into our clients' existing payment system, this will help position their business for a digital future where consumers in China use e-CNY for their daily activities," commented Ginger Cheng, the CEO of DBS Bank in China. "This showcases our dual commitment to making banking joyful for our clients while actively supporting the development of China's financial market innovation."

Since the launch of e-CNY in China, the CBDC has seen steady adoption by users. According to the data shared by DBS, more than 13 billion e-CNY are in circulation. DBS said that the currency is currently accepted across 26 cities and 17 provinces in China, and the figures are expected to grow.

Growing CBDC Adoption?

A CBDC is a digital currency developed and regulated by central banks as a digital representation of fiat currencies. Unlike a cryptocurrency, which is decentralized, a CBDC is centralized and backed by the central bank's reserves.

DBS is one of the financial institutions selected by the Monetary Authority of Singapore (MAS) for testing asset tokenization and Decentralized Finance (DeFi). Dubbed Project Guardian, Singapore aims to replicate the success of DeFi in blockchain technology and how big banks can implement it.

The MAS is also working on creating interoperable networks for digital assets. Recently, the regulator released a framework on the measures to ensure that the networks are safe and efficient. Additionally, the MAS unveiled new measures for Digital Payment Token service providers, Finance Magnates reported.