Hong Kong to Test Associating Digital Yuan with Domestic Payments Network

It has been recently revealed by the officials that Hong Kong is planning to test linking Digital Yuan with the domestic payments network of the country. The officials also revealed the second stage of the trials of the digital currency of China in the financial hub.

Hong Kong Will Test Linking Digital Yuan with Domestic Payments Network

e-CNY of China can be considered as one of the most enhanced Central Bank Digital Currency (CBDC) projects if compared to other major economies. 

As recently revealed by the Chinese officials the project is going to be domestically targeted in the beginning, but cross-border trials are also undergoing in Hong Kong. 

Talking about the recent trial, it will be exploring how the residents of Hong Kong can top up a Digital Yuan wallet utilizing the payment system of the city, which is faster. 

In addition to this, it should be noted that it is currently being utilized to make domestic payments via mobile phones.

The Chief Fintech Officer of the Hong Kong Monetary Authority or HKMA, Nelson Chow, said:

“This will help Hong Kong residents to use e-CNY when they cross the border.” 

e-HKD Potential to be Studied in Retail CBDC

The Hong Kong Monetary Authority is the de facto central banking authority in the Hong Kong Special Administrative Region recently made an announcement in a press conference that said:

“In addition to the continued effort on wholesale CBDCs, the HKMA has been working with the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre to research retail CBDCs and will begin a study on e-HKD to understand its use cases, benefits, and related risks.” 

The central banking authority also laid an emphasis on the collaboration with the People’s Bank of China, saying:

“The HKMA will also continue to collaborate with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong with a view to providing a convenient means of cross-boundary payments for both domestic and mainland residents.”