Hong Kong Monetary Authority testing China’s digital yuan
Hong Kong Monetary Authority (HKMA) has stated that it is working with the People’s Bank of China (PBOC) to test digital yuan use cases. According to a statement by Eddie Yue, chief Executive of HKMA, PBOC’s Digital Currency Institute and the HKMA are discussing the technical pilot testing of using e-CNY for making cross-border payments while making the corresponding technical preparations. He adds, “As the renminbi is already in use in Hong Kong and the status of e-CNY is the same as cash in circulation,” Yue said. “It will certainly offer an additional payment option to those in Hong Kong and the mainland who need to make cross-border consumption.”
China has been mostly focused on domestic use cases for its national virtual currency Digital Currency, Electronic Payment (DC/EP) facilitating consumers’ retail payments. The adoption of DC/EP in Hong Kong, one of the major financial hubs in Asia, could be part of its efforts to enhance the renminbi as a payments currency in the global financial system.
During a legislative council meeting in October, Hong Kong Treasury Secretary Christopher Hui said the city is most interested in wholesale and cross-border digital currency use cases, a contrast to DC/EP’s initial retail-facing use cases that are being developed by the PBOC.