The French bank BNP Paribas is part of the 8 banks authorized by the China to use thee-CNY, sa digital currencyfor its corporate customers.
In the field of central bank digital currencythe China is generally used as a reference on the international level. The world’s 2nd largest economy is the most advanced in the experimentation of a CBDC or MNBC.
Companies and banks participate in large-scale tests. This is notably the case of the French financial group BNP Paribasreports the Chinese daily South China Morning Post. This one is allowed to promote the connection of its accounts with the digital wallets storing thee-yuan.
Smart contracts, transfers… BNP Paribas is testing
The Chinese central bank has authorized eight banks to connect to its CBDC system for their corporate clients. BNP Paribas is one of these banks according to the local press. Its clients will be able to exchange e-CNY between their wallet and their bank account.
According to a bank spokesperson quoted by SCMPThis connectivity is intended to enable efficient and convenient real-time use of the Chinese CBDC. As a partner bank, BNP Paribas will participate in other experiments.
The tests conducted by the French bank as part of the MNBC project will include the use of digital currency for smart contractsthe finance supply chain and the cross-border payments.
Experimentation is a must for banks
China remains ahead of the curve on central bank digital currencies, especially compared to Europe and the United States. Its test phase was initiated in 2020. The issuance of the e-CNY remains moderate, however. The digital yuan represented in January 0.13% of cash in circulationindicated the Bank of China.
Through their participation in CBDC transaction processing, private banks such as BNP Paribas are preparing for their widespread use. In France, banks are collaborating with the Banque de France on retail and wholesale CBDC tests.
Traditional financial players are striving to gain maturity in these new assets. BNP Paribas is a partner of Swift and its CBDC interconnection solution. Also involved are BdF, the Monetary Authority of Singapore, Société Générale, HSBC and UBS.
Our participation in this Swift CBDC sandbox allowed us to see first hand what CBDC/CBDC and CBDC/cash interconnection solutions could look like and the challenges they bring,” said a Société Générale representative.