BNP Paribas China integrates digital yuan into product line

Corporate clients of BNP Paribas’ Chinese subsidiary can settle operations with e-CNY in real time. The initiative was implemented in partnership with Bank of China, South China Morning Post reports.

The bank linked wallets with CBDC to bank accounts.

Bank of China is one of ten organisations authorised to promote the use of digital yuan.

Earlier, HSBC Hang Seng Bank, in collaboration with China Construction Bank, adopted a similar solution.

BNP Paribas plans to study the use of the digital yuan for smart contracts, supply-chain financing and cross-border payments.

“The rapid spread of e-CNY has forced foreign banks to rethink their strategies and consider the competitive advantages of using CBDC in cross-border payments between enterprises”, according to a report by Oliver Wyman.

The publication noted that in 2022, monetary regulators of China, Hong Kong, Thailand and the UAE, with the participation of 20 commercial banks in a 40-day pilot, processed transactions totaling more than 150 million digital yuan ($22 million).

Earlier, former director of research at the People’s Bank of China, Cinhua Se Pin assessed the interest in CBDC as low. According to the analyst, authorities need to broaden the asset’s use cases.

According to Cinhua’s calculations, the cumulative volume of e-CNY transactions over two years amounted to just over 100 billion yuan ($14 billion), which is not ideal.

In January, the digital yuan was first used in stock-market settlements.

In late 2022, the People’s Bank of China included CBDC in the monetary base. At that time, there were 13.62 bn e-CNY in circulation (~$2 bn), which was equivalent to 0.13% of the total.

In April 2023, Visa presented a list of solutions for integrating the national digital currency into Brazil’s financial ecosystem.