Singapore’s regulatory body, the Monetary Authority of Singapore (MAS), has announced plans to pilot the digital currency “E-CNY” in collaboration with China. The pilot project aims to encourage tourism spending between the two countries. The memorandum of understanding for this collaboration was signed in 2020.
Introduction of the E-CNY
The digital currency, also known as the digital yuan, is developed by the People’s Bank of China, MAS, and the Digital Currency Institute of the People’s Bank of China. It will allow travelers from both Singapore and China to use E-CNY for tourism spending in both countries.
Details of the Collaboration
The discussions regarding the E-CNY took place at the 19th Joint Council for Bilateral Cooperation in Tianjin. This event was co-chaired by Lawrence Wong, Singapore’s Deputy Prime Minister and Minister for Finance, and Ding Xuexiang, the People’s Republic of China Executive Vice Premier of the State Council.
The digital currency is primarily designed for domestic retail payments in China. However, in the future, the country plans to explore cross-border payment programs. This project aims to meet the public’s demand for cash in the digital economy era and improve retail payment infrastructures.
MAS’s Vision for the Future Monetary System
Ravi Menon, the managing director of Singapore’s central bank, recently highlighted his vision for the future of the monetary system. He emphasized the importance of central bank digital currencies (CBDCs), tokenized bank liabilities, and well-regulated stablecoins. He believes that private cryptocurrencies falling short of fundamental financial service tests will eventually fade from the monetary scene.
“It has been a fruitful year of financial cooperation between Singapore and China. MAS welcomes the new initiatives in digital finance and capital markets connectivity, as these will catalyze new financial flows between our financial centers and deepen trade and economic relations between our economies,” said Leong Sing Chiong, Deputy Managing Director of MAS.
In addition to the digital currency collaboration, Singapore and China also announced the launch of an exchange-traded funds (ETF) link between the Singapore Exchange (SGX) and Shanghai Stock Exchange (SSE). Furthermore, the two countries agreed to implement a 30-day mutual visa exemption agreement early next year, as part of their efforts to upgrade their trade pact.
