BNP Paribas teams up with Bank of China to promote digital yuan usage

The French bank BNP Paribas is collaborating with the Bank of China (BOC) to promote China’s digital currency, the digital yuan, to its corporate clients, the South China Morning Post reported. The partnership will enable BNP Paribas China’s corporate clients to connect with the BOC system, allowing users to manage their digital yuan wallets by linking them to their bank accounts, track transactions and make payments using China’s digital currency via an e-CNY management system. The management system also promises to make it easier and more convenient for clients to use digital cash for real-time transactions. The digital yuan management system can facilitate “efficient, real-time and convenient [digital cash] practice,” BNP shared, according to The South China Morning Post. BNP Paribas China also plans to explore the use of China’s central bank digital currency (CBDC) in other areas, such as smart contracts, supply chain finance, utility and cross-border payments. To promote the adoption of its CBDC, China handed out millions of dollars worth of digital yuan across the country during the Lunar New Year period. A number of cities reportedly gave away over 180 million yuan, amounting to $26.5 million worth of CBDCs in programs such as subsidies and consumption coupons. In April, local news reported that the Chinese city of Changshu notified all civil servants within its jurisdiction that they would be paid their full salaries in digital yuan starting in May 2023. The payment terms apply to all civil servants in the public service and other state-owned units in the city. Despite the Chinese government’s efforts to promote the digital yuan, Hong Kong residents have not shown much enthusiasm for the government’s drive to promote the adoption of its CBDC. During the first four days of the hard launch of the digital yuan wallet, only 625 residents signed up, indicating a lukewarm response to the new digital currency offering.