Digital yuan pilot announced between China and Singapore

Tourists from China and Singapore will be able to use the e-yuan – China’s central bank digital currency (CBDC) – for their purchases in both countries during a pilot project, the Monetary Authority of Singapore announced on December 7.

The cross-border CBDC pilot between MAS and the People’s Bank of China’s Digital Currency Institute comes amid a number of other joint initiatives, including discussions around linking Singapore’s PayNow and China’s UnionPay for remittances.

MAS deputy managing director Leong Sing Chiong says the projects in digital finance and increased market connectivity will “catalyse new financial flows” between the financial centres, and “deepen trade and economic relations” between the two countries.

The PBoC has been actively expanding the e-yuan’s use abroad. Last year, shoppers in Hong Kong were encouraged to use the digital currency for their purchases. The PBoC’s Digital Currency Institute and the Hong Kong Monetary Authority are also active members of the mBridge project, which tests cross-border CBDCs with Thailand and the UAE.

MAS and the PBoC also announced their deeper collaboration on green finance initiatives. After the China-Singapore Green Finance Task Force was established last year, MAS said the central banks are working together on green and transition financing products, as well as capacity building. The Singapore Exchange and Guangzhou Futures Exchange also signed a memorandum of understanding to collaborate on green products, MAS said.

The announcements are part of more than 20 deals signed during the annual Joint Council for Bilateral Cooperation, which include the resumption of the staff exchange programme between MAS and the China Securities Regulatory Commission.