China is about to roll out another major development in the launch of a central bank digital currency, or CBDC. Based on the report, the Hong Kong Monetary Authority and China’s central bank are in the exploratory phases of testing the digital yuan for cross-border payments.
According to the news that surfaced on the HKMA official website, Eddie Yue, chief executive of HKMA, disclosed details about talks with the People’s Bank of China to launch pilot testing. He said:
“The HKMA and the Digital Currency Institute of People’s Bank of China are discussing the technical pilot testing of using e-CNY, the digital renminbi issued by the PBoC, for making cross-border payments, and are making the corresponding technical preparations.”
HKMA Develops Cross Broader Platform
HKMA teamed up with the Bank of Thailand to launch a joint research project in order to examine the benefits and risks related to cross-border payments and digital currencies. According to Yue, the project is currently in the “second stage,” which will examine cross-border operability and scalability of CBDC participation.
Yue brief that the project aim is to develop a cross-border payment platform for the region:
“From a longer-term perspective, we have a good chance of building a regional cross-border payment platform by riding on the global trend of strengthening cooperation in cross-border payment.”
Several countries are pushing the plans for Central Bank Digital Currencies. Most state regulators are still investigating perks and uncertainties, but this highlights a widespread motivation to consider the launch of federal digital currencies. China has made digital yuan its topmost priority, with China’s central bank already conducted pilot tests in several major cities. As of early November, more than $300 million worth of transactions were processed during pilot testing in four major cities.