After the successful proceeding of the first phase of the testing of the Digital Yuan, Hong Kong is in talks with China to stretch its cross-border testing. This has marked yet another step toward wider adoption of the currency.
Hong Kong to Stretch Testing of Digital Yuan to China
The Monetary Authority of Hong Kong has recently conducted tests with the Digital Currency Institute of the People’s Bank of China.
In addition to this, the Hong Kong Monetary Authority said in an e-mailed response to the questions asked that it involved a bank designated by the mainland authority, as well as the merchants and bank staff.
The e-mailed response said:
“We have tested the use of the related app, system connectivity, and certain use cases such as cross-boundary purchases.”
Along with this, the statement said:
“We are discussing and collaborating with the PBOC on the next phase of technical testing, including the feasibility of broadening and deepening the use of e-CNY for cross-boundary payments.”
Also, it should be known that the People’s Bank of China is pretty ahead of other major central banks in the development of its own digital currency.
The bank is looking forward to replacing cash and maintaining control over a payments landscape that has become increasingly dominated by technology companies not regulated like banks.
Payment Infrastructure Underpinning e-CNY can Address Substantial Portion of Cost Base
As revealed in the report released on Wednesday by Oliver Wyman, the usage of the Digital Yuan in Hong Kong could lead to a much faster and cheaper cross-border payment and clearing process.
Michael Ho, the Principal of Financial Services at Oliver Wyman and Co-Author of the report said:
“If the payment infrastructure underpinning e-CNY were to roll out for cross-border payments at scale, we believe it can address a substantial portion of this cost base.”
China could promote the overseas use of digital yuan starting with the Greater Bay Area, a massive urban cluster that includes Shenzhen, Macau, and Hong Kong.