SWIFT and China’s Central Bank, PBoC, Partner To Launch A New Digital Payments Venture
- PBoC partners with the SWIFT payments system to form a new financial payment company.
- The full details of the partnership are yet to be released.
- China is hastening the release of its central bank digital currency (CBDC).
In a report first published by The Block, the clearing center and the digital currency research institute at the People’s Bank of China (PBoC) and SWIFT, the global interbank settlement firm, SWIFT, have formed a partnership to launch a new financial payment service, Finance Gateway Information Service Limited, public records show.
According to the reports, the firm was registered on January 16, starting with 10 million EUR (~412 million) as the incorporation capital. No further details on the functions or scope of the funding were offered on the registration document. The PBoC and SWIFT both declined to comment on the matter.
SWIFT’s Hong Kong subsidiary largely owns the firm with 55% of the incorporation contribution and PBoC’s fully-owned domestic subsidiary, China National Clearing Center (CNCC), which will own 34%of the new entity. Other investors in the initial funding include CNCC’s subsidiary Cross-border Interbank Payments and Settlement Limited (CPIS), PBoC’s Digital Currency Research Institute, and Clearing Association of China (PCAC).
According to a person familiar with the matter, there are five board members in the new entity, including SWIFT China's CEO, Daphne Huang; Cheng Shigang, a vice general secretary of the PCAC; three members from the global settlement firm and Mu Changchun, the head of the PBoC's digital currency research institute.
SWIFT announced a new platform to ease account payment services and compete with Ripple, VISA, and MasterCard in April last year. Moreover, SWIFT has been at the forefront in boosting the Chinese Yuan's use through its platform.
China’s CBDC is Around the Corner
The increasing digital payment projects cropping up in China could signal that the digital yuan is closing in on its launch. Earlier this month, the PBoC completed its largest pilot program for the CBDC in Shenzhen province, with over $3 million worth of digital yuan distributed to over 100,000 citizens in the area.