Updates on China’s Digital Currency: Hong Kong Teams Up with e-CNY
People’s Bank of China Expands Central Bank Digital Currency Project
The People’s Bank of China (PBoC) continues to develop its central bank digital currency (CBDC) project, introducing innovative solutions in the realm of fast payments. The latest actions of the bank involve integrating the fast payment system with the e-CNY (electronic currency of China) in Hong Kong, marking a groundbreaking event in the global financial market.
Interoperability of the System as a Groundbreaking Step
Interoperability, the ability to integrate different systems and make them work together, has been achieved for the first time by connecting the fast payment system with the central bank digital currency. As a result, residents of Hong Kong now have the option to top up their e-CNY wallets through 17 retail banks in the region.
Strengthening Financial Ties
In January, in collaboration with the Hong Kong Monetary Authority (HKMA), PBoC announced a series of measures aimed at deepening financial ties between Hong Kong and mainland China. These actions seek to promote the openness of China’s financial market and reinforce Hong Kong’s status as an international financial center and hub for businesses in offshore yuan.
Introduction of e-CNY in Practice
Despite being in the early stages of development, only about 300 merchants in Hong Kong accept e-CNY. However, Chinese authorities are initiating broader tests, including introducing the digital currency for the salaries of state workers in certain Chinese cities.
Expansion Beyond China’s Borders
Decisions made by the PBoC also lead to international initiatives, such as cross-border tests with Singapore, aiming to connect Singapore’s PayNow system with China’s UnionPay for money transfers. The bank is also actively encouraging foreign tourists to use the CBDC, which could create new opportunities in the global payment system.
Summary
The actions of the People’s Bank of China have a significant impact on the global financial market, introducing innovative solutions in the realm of central bank digital currencies. The development of e-CNY and interoperability tests represent a step towards the digital transformation of payment systems, gaining increasing interest from both residents and foreign partners.
