Digital Yuan Payments Pilot to be Launched by Chinese Central Bank
Following the successful in-country digital yuan pilots conducted by the Chinese central bank, China is all set to take the pilot cross-borders. To carry out a cross-border pilot, the Chinese central bank has collaborated with the Hong Kong Monetary Authority (HKMA).
In collaboration with HKMA, the Chinese central bank will undergo preliminary stages of the cross-border digital-yuan payments pilot. This has marked yet another milestone in the success and development of China’s digital-yuan adaption.
The Hong Kong Monetary Authority (HKMA) has also confirmed these reports through its website on Friday. Eddie Yue who is the Chief Executive at HKMA has also commented on the current developments in the pilot phase. He also provided an update on the recent developments of the cross-border digital-yuan pilot.
He gave an indication that HKMA is currently in talks with the People’s Bank of China. The talks are related to the initiation of the pilot of the digital yuan (e-CNY).
The CEO of HKMA also talked about the benefits that the Mainland Chinese and the people of Hong Kong can avail from this development. He stated that the initiation of e-CNY will make the lives of these people very easy and convenient.
He stated that the digital-yuan will turn out to be very beneficial as it represents the value of the cash that is already in circulation. On top of that, as the yuan is already being used and circulated in Hong Kong, it will only be a matter of convenience for the people to adopt it.
When it comes to Central Bank Digital Currency adoption and development, China has been at the forefront. The central bank of China has reported that since the launch of the pilot, it has successfully processed $300 million worth of transactions. This volume of transactions was reported by the central bank of China at the beginning of November 2020.
The central bank of China launched the first pilot for the digital-yuan in four major cities in the month of April 2020. After the success of the pilot in April, the pilot was rolled out to nine metropolitan areas in China.
As far as Hong Kong is concerned, the country has been in the process of finding the best use for CBDC for the past three years. The think-tank behind the adoption of the CBDC in Hong Kong is the Special Administrative Region.
Yue stated that this is not the first time HKMA will be collaborating with another country to conduct research on cross-border digital-currency transactions. Back in 2019, HKMA collaborated with the Bank of Thailand to carry out its research on the issues and concerns related to cross-border digital-currency payments.
Yue confirmed that the project with the Bank of Thailand is currently in its second stage. In this stage, both entities will be looking into the scalability and operability of cross-border CBDC participation.