Chinese banks explore local e-CNY wallets for foreign firms via upgraded platform

Beijing is expanding its central bank-backed digital currency network to offshore institutions, including Hong Kong branches, while banks are also exploring local e-CNY wallets for foreign firms to deepen cross-border integration.

“We currently have 30 domestic banks as e-CNY operators. Right now we’re working to extend this capability to offshore banks,” Lu Yuan, deputy head of the People’s Bank of China’s digital currency research institute, said on a panel at Hong Kong’s Fintech Week.

“We hope in the very near future that the branches of the incumbent operators in Hong Kong could also open e-CNY accounts for their enterprises and individual clients.”

Currently, overseas banks are accessing the digital yuan system through the Cross-border e-CNY Transfer Services (CBETS) platform, a new-generation infrastructure for cross-border e-CNY payments.

China launched the commercial version of its upgraded CBETS platform in June, allowing overseas banks to process round-the-clock digital payments without overhauling legacy IT systems.

Industrial and Commercial Bank of China (ICBC), China’s largest bank in terms of assets and also a core e-CNY operator, has already recorded cumulative transaction volumes reaching hundreds of billions of yuan.

“We encourage our overseas institutions to continue to explore opening e-CNY enterprise local wallets, so that foreign enterprises can also have more benefits,” ICBC executive Zhang Yi said on the same panel.

The state-owned lender is also among the first batch of direct participants on the CBETS platform.

Zhang also encouraged peers to consider taking action by integrating e-CNY with their own operations. “As the CBETS remains free of charge, it is a very good time for you,” she said.

As a leading global payment and settlement bank, HSBC was seeing strong customer demand for cross-border renminbi settlements, said Lewis Sun, managing director and group head of digital currencies, corporate and institutional banking at HSBC.

“The bank has already launched both retail and wholesale e-CNY services in mainland China, with corporate clients receiving e-CNY directly into their operational accounts,” he told the panel.

Sun added that under multilateral initiatives like mBridge and CBETS, transaction volumes had grown steadily, showing that corporate clients now used e-CNY in their daily operations.

In a report released on Monday, Hong Kong’s Financial Services Development Council (FSDC) recommended optimising regulatory coordination, strengthening payment infrastructure, promoting digital assets and tokenisation, developing cross-border trust infrastructure, and cementing the city’s role as a multicurrency payment centre.

By enabling different payment solutions to coexist and interoperate, Hong Kong can meet diverse market needs while retaining the flexibility to adapt as technologies and standards evolve, the council said.

China began piloting the digital yuan in some cities in 2019, becoming one of the first major economies to test a central bank digital currency on a large scale.

Earlier this year, China’s central bank upgraded the digital yuan from a cash equivalent to “digital deposit money” – allowing it to accrue interest like bank deposits.

As of September, around 4.3 billion digital yuan transactions worth around 31 trillion yuan had been processed, according to data released by the central bank.