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BNP Paribas partners with Bank of China to boost digital yuan for business
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(Kitco News) -
In a first for a foreign institution, BNP Paribas has partnered with Bank of China (BOC) to enable their corporate customers to seamlessly transact in China’s central bank digital currency (CBDC), the French bank announced on Thursday.
“The collaboration has once again demonstrated our commitment to the China market,” said BNP Paribas China chief executive CG Lai. “We will continue to enhance our customer service capabilities through digital innovation and contribute to China’s economic development.”
The new partnership entails BNP Paribas China connecting with BOC to launch a digital yuan management system for its corporate clients. The system will link clients’ e-CNY wallets to their BNP Paribas bank accounts to facilitate “efficient, real-time and convenient” digital yuan usage.
BNP Paribas is the first foreign-owned bank to be included in the country’s digital yuan rollout. Until now, China had only authorized 10 domestic banks to handle their CBDC.
The French bank will also explore the opportunities for expanding the use of China’s CBDC to smart contracts, utility payments, supply chain finance, and cross-border payments.
Louise Zhang, head of BNP Paribas transaction banking, said the new collaboration will help the bank provide “innovative, efficient cash management and trade financing services to local and multinational clients.”
China continues to lead the world in integrating its CBDC into its financial system. At the end of 2022, China’s central bank revealed that the total amount of digital yuan in circulation had surpassed 13.61 billion yuan ($2 billion), a major milestone which nonetheless represents only 0.13% of the 10.5 trillion yuan in circulation.
During this year’s Lunar New Year celebration and Spring Festival in China, there were almost 200 digital yuan-related activities hosted that saw more than 180 million ($26.6 million) of the digital fiat passed out to citizens in various forms, including subsidies, consumption coupons and other programs.
The e-CNY is now being pilot tested in 17 provinces across the country, including 36 large cities and 5.6 million merchants.
China has also explored the use of the digital yuan for cross-border payments with multiple countries and jurisdictions, including Hong Kong, Thailand, the United Arab Emirates, India and Russia.
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