December 12, 2023
By Sharan Kaur Phillora
In a significant step towards the global adoption of digital currencies, Singapore and China have initiated a cross-border pilot program that will allow tourists to use China’s central bank digital currency, the digital yuan (e-CNY), during their travels. This move, announced by the Monetary Authority of Singapore (MAS), aims to streamline tourist transactions and deepen financial cooperation between the two nations.
Here’s what we know:
The initiative, a collaboration between MAS and the People’s Bank of China’s Digital Currency Institute (PBCDCI), is rooted in a Memorandum of Understanding on digital finance cooperation signed in 2020. It is designed to enhance convenience for travelers by allowing them to use e-CNY for tourism spending in both Singapore and China. This development reflects the broader trend of central banks exploring and experimenting with digital currencies as part of the evolving financial landscape.
China has been at the forefront of central bank digital currency (CBDC) development, actively testing its e-CNY project. The People’s Bank of China (PBOC) has progressively expanded the pilot program, with the e-CNY now being used in various regions across China. This expansion highlights China’s commitment to testing and refining the technology before considering wider adoption.
The collaboration also involves new digital finance and capital markets initiatives, according to a press statement from the Monetary Authority of Singapore. These initiatives are expected to further enhance the practical applications and convenience of CBDCs for international transactions.
By integrating the digital yuan for payments and transactions within both countries, this collaboration provides a practical use case that extends beyond domestic borders. It not only facilitates tourism spending but also serves as a real-world test of cross-border CBDC usage. As financial institutions explore opportunities within the digital currency ecosystem, they contribute to the overall legitimacy and acceptance of these digital assets.
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.
