Hong Kong’s central bank has been working with China’s digital currency institute to trial the use of the digital yuan on cross-border payments. This will be the first instance of the central bank-backed digital currency’s use outside China. The Hong Kong Monetary Authority’s chief executive Eddie Yue said that the regulator has been working with the People’s Bank of China on trial. He further noted, despite the advances in digital payments, cross-border payments remain a great pain point.
“The digital yuan may be the solution.”
According to Eddie Yue, for most people, cross-border payments take days and cost outrageous fees. He believes the digital yuan may be the solution. He stated, “as the renminbi is already in use in Hong Kong and the status of e-CNY is the same as cash in circulation, it will bring even greater convenience to Hong Kong and Mainland tourists.” The chief executive stated that the two central banks have not yet decided on the timeline for the launch of the service. However, he believes that “the launch of e-CNY will offer an additional payment option to those in Hong Kong and the Mainland who need to make cross-border consumption.”
Chinese city to pilot the digital yuan this month.
The recent announcement comes at a time when the central bank has revealed that it will be conducting a new trial this Friday, December 11. The trial will take place in the city of Suzhou, where the bank will select 100,000 people to participate. The trial will follow a similar model to that deployed in Shenzhen last month, which saw $1.5 million in digital currency enter circulation. Residents who won digital yuan in the lottery were permitted to spend it across 3,000 stores in the city that had signed up to participate in the trial.
