China’s Central Bank Digital Currency (CBDC) – e-yuan – will be now used for cross-border payments between China and Singapore, facilitating tourist spending between the two countries.

The Monetary Authority of Singapore (MAS) announced that travellers from China and Singapore will be now allowed to use e-CNY, China’s Central Bank Digital Currency (CBDC), for tourism spending in both countries during their overseas travel.

The cross-border CBDC pilot follows the Memorandum of Understanding (MOU) on digital finance cooperation signed by MAS and the Digital Currency Institute, People’s Bank of China (PBCDCI) in 2020.

The initiative is part of the joint digital finance and capital markets initiatives package introduced by Singapore and China on Dec. 7. The package also includes the launch of the Exchange Traded Funds (ETF) Product Link between the Singapore Exchange (SGX) and Shanghai Stock Exchange (SSE), and signing of MOU between SGX and Guangzhou Futures Exchange (GFEX) on information exchange, mutual visits, training, and joint research.

The two countries are also discussing potential remittance linkage between Singapore’s PayNow and China’s UnionPay, as well as enhanced bilateral cooperation in green and transition finance.

At the same time, we have recently reported that MAS has instructed companies providing money transfer services to suspend the use of non-bank and non-card channels when interacting with individuals interested in cross-border transactions to China.

The regulator made this decision after reports of transactions to China carried out by individuals being frozen in the accounts of their recipients in Chinese banks. MAS has decided to suspend some transactions to China to minimize the risk for consumers who transfer money to this country.