HSBC China Becomes First Bank to Offer Digital Yuan Services

China's HSBC Bank entity has become the first foreign bank in the country to offer corporate clients digital yuan (e-CNY) services.

This new service enables businesses to connect their traditional bank accounts with digital yuan accounts, simplifying asset management, according to a recent statement from the bank.

HSBC's Corporate e-CNY Initiative

To launch its corporate e-CNY services, HSBC partnered with Nord Anglia Education Group, an organization managing schools across China. This collaboration involved enabling e-CNY payments in six of its schools located in Shanghai, Beijing, Guangzhou, Jiaxing, and Suzhou. 

“The low cost and instant settlement advantages of e-CNY, as well as the automatic conversion function provided by HSBC, help us achieve cost reduction and efficiency improvement,” said Lin Cheng, deputy director of finance and tax at Nord Anglia Education Group. 

e-CNY's integration into educational institutions shows the potential of digital currency for broader applications. Lin Cheng emphasized that the continuous improvement of e-CNY infrastructure and the expansion of its application scenarios will open new opportunities for the digital upgrade of campus management. 

A Milestone for Digital Currency in China

China’s central bank began piloting the e-CNY in 2019 in major cities like Shanghai and Beijing through a mobile app. The digital yuan, a digital version of the traditional yuan, is designed to partially replace physical cash, and enhance transaction efficiency and reduce costs

Initially, the e-CNY was aimed at retail users to facilitate everyday purchases within China. Over the years, the scope of this digital currency has expanded, with pilot programs in dozens of regions and its use in state employee salaries in some cities.

However, despite its growing use, challenges remain. Many users are still reluctant to adopt the e-CNY due to functional limitations and privacy concerns, according to a South China Morning Post.

To increase e-CNY adoption, Hong Kong has announced that residents can set up digital wallets for cross-border payments. This initiative is part of a broader strategy to encourage the use of digital currency and integrate it into daily financial activities.