Cross-border digital yuan payment trials underway
The Hong Kong Monetary Authority said it is working with the People's Bank of China to study the technical test of cross-border payment using digital yuan and make corresponding technical preparations.
Specifically, the authority is working with the Digital Currency Research Institute, the arm of the central bank in charge of minting the country’s sovereign digital currency to study the use of e-yuan for cross-border payment technology testing, according to Eddie Yue Wai-man, chief executive of the HKMA.
Last month, the central bank joined the Multiple Central Bank Digital Currency Bridge, a project exploring cross-border payments using blockchain technology which was initiated by the HKMA and the Bank of Thailand.
This “m-CBDC Bridge” project aims to better facilitate real-time cross-border payments, which could reduce costs and enhance transparency for users.
The progress came as Beijing is eyeing global digital currency use to internationalise the yuan and the HKMA is looking to apply new technologies to address long-standing pain points in banking, international remittances in particular.
“The process is currently slow and costly, but CBDCs have a range of promising applications and, together with our partner central banks, we want to be at the forefront of this development,” Yue said in a keynote speech at the Asian Academy of International Law Conference in February.
As the status of the e-yuan is the same as cash in circulation, it will offer an additional payment option to those in Hong Kong and the mainland who need to make cross-border consumption and bring even greater convenience to tourists, the Hong Kong official said previously.
Chinese telecom giant Huawei Technologies Co and Internet and e-commerce powerhouse Alibaba Group are reported to have joined design work for the cross-border payment network of the digital currency.
JC Finance & Tax Interconnect Holdings Ltd, a listed company principally engaged in Internet finance and taxation, is reported to have technical strength in cross-border settlements and payments in digital currency, and has released the country's first electronic invoice platform supported by blockchain technology.
Shenzhen-based financial technology firm Forms Syntron has applied for an invention patent in the field of double offline electronic currency payment and obtained a software copyright for digital wallets.