BEIJING – Tickets at tourist sites like Beijing’s Forbidden City, bus rides in Guangzhou and drinks at Starbucks. Singapore travellers to China now have the option of linking their local bank accounts to a digital yuan app for such purchases.
From December, customers of the Singapore branches of the Industrial and Commercial Bank of China (ICBC) and the Bank of China (BOC) can top up their e-CNY wallets from their Singapore bank accounts.
The
launch of this pilot scheme
was announced at the annual Singapore-China talks, held under the Joint Council for Bilateral Cooperation (JCBC) in Chongqing on Dec 15.
Here is a guide to using e-CNY in China.
It is a digital currency issued by the People’s Bank of China. It was piloted in 2019, making China the first major economy to extensively test and develop a central bank digital currency.
Even before the pilot announced on Dec 15 for ICBC and BOC customers, foreigners have been able to use e-CNY in other scenarios. In 2022, it was piloted for athletes and tourists at the Beijing Winter Olympics.
The e-CNY app can be downloaded from the Google Play or Apple App stores, and new accounts set up by registering a mobile number.
Foreigners do not need to scan their passports or use other forms of real-name authentication to set up an account – essentially allowing users to be anonymous.
But such users have a single payment limit of 2,000 yuan (S$366) and a daily payment limit of 5,000 yuan.
At the other end of the spectrum, users verified with Chinese residence identification documents are allowed single payments of up to 20,000 yuan.
The digital wallet can be topped up with an international credit card like a Mastercard or Visa card.
Foreigners can also reload their e-CNY wallets using cash at physical bank service outlets of 10 authorised financial institutions in China, including ICBC and BOC.
Unlike WeChat Pay and Alipay, which charge a 3 per cent transaction fee on payments above 200 yuan, an e-CNY payment incurs no such fees.
In China, brick-and-mortar stores that accept digital yuan display distinctive e-CNY red-and-white signs. Payment can be made by presenting your app’s unique QR code, or by scanning a merchant’s code. This is similar to Alipay and WeChat Pay.
One key advantage of e-CNY is a tap-to-pay function, using near field communication (NFC). This also allows payment even if the user has no internet connection.
While the merchant acceptance rate for e-CNY is growing – in Beijing alone, some 540 million transactions have been made so far – it remains uneven across the country.
The wallet is still less widely accepted than Alipay and WeChat Pay, which are by far the dominant modes of payment in the country. Market vendors and other smaller merchants may not take e-CNY.
It is also a checkout option on online shopping apps such as Meituan, Taobao, Didi, CTrip and JD.com.
In recent years, China has been on a drive to increase the domestic acceptance rate of e-CNY, as well as its international use.
The motivation for foreign tourists to use e-CNY goes beyond convenience, said Mr Elgin Chan, a PhD candidate at the S. Rajaratnam School of International Studies, who has researched the digital renminbi.
The aim is to advance the renminbi’s internationalisation, he told The Straits Times. “By integrating the digital yuan into everyday transactions abroad, Beijing seeks to gradually chip away at the (US) dollar’s dominance and familiarise the world with its currency.”
He said that e-CNY strengthens China’s presence in cross-border payment systems. Unlike private platforms, it affords the state control over transaction flows and data while showcasing its technological capabilities.
“Tourist usage may be small for now, but it serves as a purposeful testing ground, setting the stage for a future where the digital yuan plays a larger role in trade, remittances and regional financial influence.”
Observers have said that greater cross-border use of e-CNY could mean less reliance on the US-led Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.
But China’s stringent controls on foreign exchange remain a major hurdle in making the renminbi a serious competitor to the US dollar’s status as the world’s primary reserve currency, experts say.
Singapore-China tiesChinaCurrencies
