Hong Kong Tests Cross-Border Digital Yuan: PBoC Official Reported

Hong Kong tests cross-border digital yuan after China completed its first pilot according to a PBoC official as we are reading more in our latest cryptocurrency news today.

Wang Xin, the director of the People’s Bank of China research bureau, commented that the Hong Kong Monetary Authority and the bank conducted technical tests on the cross-border use of the central bank digital currency of China. The official announcement was made during a press conference hosted by the State Council Information Office of China which is the local news agency there.

The news came after Mu Changchun who is the head of the PBoC digital currency research institute, suggested new rules for CBDCs last week. Speaking of the Bank for International Settlements seminar, Mu called on the global financial institutions to ensure the global interoperability of the national digital currencies:

 “Interoperability should be enabled between CBDC systems of different jurisdictions and exchange. The PBoC had shared the proposals with other central banks and monetary authorities.”

The latest news brings a major update to China’s aggressive CBDC development and after debuting internal digital yuan pilots back in 2020, the Chinese central bank was pursuing a move of its CBDC expertise beyond its own jurisdiction. The PBoC joined the central bank authorities in Hong Kong, United Arab Emirates, and Thailand to expose a cross-border CBDC this year. Now, Hong Kong tests cross-border settlements but back in 2020, an official at the HKMA claimed that the regulator and the PBOC were at their preliminary stages of piloting the digital yuan for cross-border payments.

As we reported earlier, China proposes global rules on central bank digital currencies back on Thursday and discussed potential uses and implications of the sovereign digital currency. With the COVID-19 pandemic still expanding and exposing all inefficiencies in traditional payments systems, there has been a need to digitize legacy financial infrastructures and with the rise of cryptos over fiat currencies, central banks worldwide started developing their own CBDCs. China is the leader in the CBDC race and as the country already started testing pilot programs, it is heavily focused to be the first and the best. The country banned crypto trading in 2017 but made great progress in experimenting with state-backed digital currencies.