A former governor of the Chinese central bank said that cooperation with Singapore on digital currency could begin with retail payments where there are more opportunities and fewer risks.
According to Zhou Ziaochuan, ex-governor of the People’s Bank of China, initial focus on retail payment’s between the world’s second-largest economy and Singapore would be a safer and more efficient way of testing central bank digital currencies (CBDC).
While central banks elsewhere have focused on other areas such as settlement and payment in financial markets or cross-border remittances, retail stands as the sector with the most «urgent needs», according to a «Caixin» report quoting Zhou during a Chongqing-based meeting this week.
Regulatory Ease
In addition to opportunities, Zhou also noted that there were also fewer risks involved with initially focusing on retail payments.
This is due to disruptions from non-retail payments in regulatory matters such as exchange rate or anti-money laundering rules, he noted.
Zhou’s comments for further China-Singapore CBDC cooperation echoes those of the Monetary Authority of Singapore’s managing director Ravi Menon, who in June unveiled that it was discussing with mainland authorities on landing scenarios. Potential rollouts could include digital yuan usage by Chinese tourists abroad.
