In moving forward with their joint testing of the use of the digital yuan for cross-border payments, the Digital Currency Institute of the People’s Bank of China and the Hong Kong Monetary Authority are in partnership.
The HKMA staff confirmed that the first phase of testing for the currency’s cross-border use had been successful, according to Bloomberg. Selected merchants and a bank designated by mainland Chinese authorities, were part of the initial tests involving multiple parties
HKMA said that plans for the next phase of pilots are already underway and according to them:
“We have tested the use of the related app, system connectivity and certain use cases such as cross-boundary purchases. We are discussing and collaborating with the PBOC [People’s Bank of China] on the next phase of technical testing, including the feasibility of broadening and deepening the use of e-CNY for cross-boundary payments.”
China’s ongoing development of the digital yuan — a central bank digital currency, that is also sometimes referred to by the names DC/EP or e-CNY — has set an ambitious pace for global research into and potential issuance of CBDCs worldwide.
The country is the largest economy in the world to be so far ahead with its CBDC development and testing, having completed numerous advanced pilots on the mainland and announcing further plans to promote the currency’s adoption during the 2022 Winter Olympics in Beijing.
HKMA has itself been engaged in multiple collaborative projects to explore the feasibility of CBDC issuance since 2017, both for domestic inter-bank payments and for cross-border payments, with partners that include the Bank of Thailand and the Central Bank of the United Arab Emirates, as well as the PBoC.