In Hong Kong, the Central People’s Bank of China plans to build on its digital yuan pilot by increasing cross-border functionality.
A Weibo post by Caixin and a report from The Paper confirmed that Xuan Changneng, the Deputy Governor of the PBoC, stated that the bank wanted to increase Hong Kong’s e-CNY pilot program with an emphasis on improving its cross-border functionality.
According to Xuan, implementing this action would enhance the ease of operations for companies located in Hong Kong as well as those in Mainland China.
He mentioned that close collaboration would be pursued by the PBoC alongside the Hong Kong Monetary Authority (HKMA), which functions as the central banking institution and primary financial overseer of Hong Kong.
Xuan announced that the collaboration between the PBoC and the MKMA aims to propel the widespread acceptance of CBDCs through the implementation of various innovative policies.
The Deputy Governor elucidated that there will be fresh financial services and collaborative measures facilitated by CBDC.
How Will Mainland China and Hong Kong Expand Digital Yuan Cooperation?
Xuan outlined a range of sectors wherein the PBoC and the HKMA will join forces to broaden the outreach of e-CNY. These encompass:
- Extend additional assistance to institutions interested in taking part in the pilot program
- Enhance the user experience for individuals utilizing the digital yuan
- Augment the quantity of Hong Kong-based banks that facilitate transactions with the e-CNY
- Broaden the range of services and potential applications for both businesses and individuals based in Hong Kong
- Investigate possible new cross-border remittance services that can be used for small-scale payments using the digital yuan
- Enhance the adoption of digital yuan by merchants in Hong Kong
- Design digital yuan services that align better with the preferences and practices of Hong Kong residents
Additionally, the Deputy Governor highlighted the joint efforts between PBoC and HKMA to increase the compatibility of digital yuan with payment systems in Hong Kong.
The PBoC also noted in its statement that it will further promote the development of e-CNY, especially in key sectors such as cross border e-commerce and education.
In late 2020, the inaugural digital yuan cross-border payment pilot project took flight courtesy of the PBoC’s Digital Currency Research Institute.
Ever since that time, the bank has accelerated the advancement of the pilot by implementing a link to Hong Kong’s speedy payment system network.
Mainland Chinese players, such as JD.com and the Commercial Bank of China have also been very active in cross-border initiatives involving digital yuan.
HSBC, alongside other banks in Hong Kong, have now started offering digital yuan services to their clients.
Frequently Asked Questions:
What is the plan of the People’s Bank of China for Hong Kong?
To improve the cross-border e-CNY project, PBoC is planning to expand its current pilot on digital yuan in Hong Kong.
Why do we need to increase the digital yuan pilot in Hong Kong?
Deputy Governor Xuan Changneng revealed that the expansion endeavours to enhance the ease of operation for businesses in Hong Kong and Mainland China.
Who will the PBoC partner within Hong Kong to implement this initiative?
Acting together, the PBoC will closely cooperate with the HKMA as its flagship financial regulator and a central bank in Hong Kong.
What measures are meant to promote the widespread adoption of CBDCs?
The PBoC and the HKMA have collaborated to roll out new policy ideas. They include the provision of financial services through a Central Bank Digital Currency (CBDC) and activities that promote mass usage of digital yuan.
What domains are the focus of the PBoC and HKMA’s collaboration to promote the use of digital yuan?
Their objective is to offer assistance to the establishments involved in the trial while enhancing ease for users of the digital yuan. The goal is also to augment the quantity of Hong Kong banks that process e-CNY transactions and broaden the range of services available to corporations and individuals in Hong Kong.
What kind of advancements are anticipated in the collaboration between Mainland China and Hong Kong regarding the digital yuan?
This partnership encompasses extensive research into novel cross-border remittance platforms powered by digital yuan, amplifying the presence of digital yuan-accepting merchants in Hong Kong, and devising services that correspond to the preferences of Hong Kong’s inhabitants.
In terms of crucial scenarios like cross-border e-commerce and education, what advancements have been achieved?
To increase their coverage, the PBoC is set to develop in key areas including cross-border e-commerce and education. This will be an extension of the earlier digital yuan cross-border payment pilot project that started in late 2020.
Which Chinese and Hong Kong firms have collaborated in cross-border projects that incorporate the digital yuan?
JD.com, the Commercial Bank of China, and HSBC along with other big players from mainland China and Hong Kong have collaborated in engaging in cross-border operations related to the digital yuan.
When did the PBoC initiate its first pilot project for cross-border digital yuan payments?
In late 2020, the PBoC’s Digital Currency Research Institute was able to initiate a pilot project for cross-border payments using the digital yuan.Q10. In what ways has progress regarding the digital yuan pilot in Hong Kong been improved?
Through the implementation of a connection to Hong Kong’s Fast Payment System network, the PBoC has taken significant strides in advancing the pilot’s development, thereby enhancing accessibility and utilization opportunities.