Key Insights
- HSBC’s China entity has become the first foreign bank to offer digital yuan services for both retail and corporate clients in China.
- Corporate clients can now link their bank accounts to e-CNY wallets to manage digital currency holdings.
- China has been expanding its digital yuan pilot program nationwide, with Hong Kong also allowing e-CNY wallets for cross-border payments.
HONG KONG (MarketsXplora)- HSBC Bank (China) Co Ltd said on Friday it has started offering services linked to China’s digital currency for corporate clients, making it the first foreign lender to provide e-CNY services to both retail and business customers in the country.
The bank’s Chinese entity said in a statement that corporate clients can now link their bank accounts to digital yuan wallets to manage their holdings of the electronic currency, also known as the e-CNY.
HSBC said it had helped an unnamed educational group receive payments in e-CNY across six branches in major Chinese cities such as Shanghai and Beijing.
The move comes as China pushes to establish its digital yuan, or e-CNY, ahead of other major economies looking at launching central bank digital currencies (CBDCs).
The People’s Bank of China (PBOC) kicked off domestic trials of the digital yuan in late 2019 and has expanded the pilot programme to numerous regions across the country, including paying some state employees in e-CNY.
However, adoption has remained relatively patchy amid concerns around privacy and functional limitations, the South China Morning Post reported last month.
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Authorities have been encouraging greater usage of the digital yuan, with neighbouring Hong Kong announcing last month users there could open e-CNY wallets to facilitate cross-border payments.
Global lenders have been jostling to offer digital yuan services, seeing a potential opportunity in facilitating transactions for clients in the world’s second-biggest economy.
For HSBC, the biggest foreign bank operating in China, offering corporate e-CNY wallets marks another step in establishing its digital yuan capabilities after becoming one of the first to offer retail services last year.
The PBOC is one of the most advanced among major central banks in rolling out a CBDC, putting it at the vanguard of the global race to develop and regulate digital currencies.