The Monetary Authority of Singapore (MAS) has on Thursday announced new digital finance and capital markets initiatives to expand its financial cooperation with China.

The initiatives are cross-border E-CNY pilot between China and Singapore, and launch of the exchange traded funds (ETF) product link between the Singapore Exchange (SGX) and Shanghai Stock Exchange (SSE), MAS said in a statement.

Following the signing of a Memorandum of Understanding (MOU) on digital finance cooperation in 2020 between MAS and the Digital Currency Institute, People’s Bank of China (PBCDCI), MAS and PBCDCI are embarking on a pilot that will allow travellers from both countries to use e-CNY for tourism spending in Singapore and China.

This will enhance convenience for travellers when making purchases during their overseas travel.

Meanwhile, building on the successful launch of the ETF Product Link between SGX and Shenzhen Stock Exchange (SZSE) at the 18th JCBC in 2022, SGX and SSE signed an MOU in May 2023 to establish an ETF Product Link.

On December 1, 2023, CSOP Huatai-Pinebridge SSE Dividend Index ETF and the CSOP iEdge Southeast Asia+ TECH Index ETF were launched on SGX and SSE respectively as the first product pairing under the new ETF Product Link.

This successful launch opens up greater collaboration opportunities between fund managers in both markets, and improves investors’ access to ETF products in each other’s markets.

The initiatives were discussed at the 19th Joint Council for Bilateral Cooperation (JCBC) in Tianjin, which was co-chaired by Singapore Deputy Prime Minister and Minister for Finance, Lawrence Wong, and the People’s Republic of China Executive Vice Premier of the State Council, Ding Xuexiang.

According to the statement, SGX and GFEX have also signed an MOU to collaborate on information exchange, mutual visits and training, and joint research on products and business areas relating to green development.

Singapore’s local banks and China’s UnionPay International have also embarked on early-stage feasibility discussions on a potential remittance linkage between Singapore’s PayNow and UnionPay pursuant to each jurisdiction’s laws and regulations.

Such a linkage could facilitate secure, convenient and cost-effective cross-border payments and remittances between the two countries.

Following the establishment of the China-Singapore Green Finance Task Force (GFTF) at the 18th JCBC last year to deepen bilateral cooperation in green and transition finance, the GFTF held its inaugural meeting in April 2023.

Under the GFTF, MAS and the People’s Bank of China are working on key initiatives, including a green corridor for green and transition financing products, as well as capacity building.

“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 (Markets and Development), MAS.

MAS lays foundation for safe and innovative use of digital money in Singapore