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China’s central bank has set its virtual yuan to a new pace by allowing some Hong Kong residents to use it to make cross-border payments, state media reported Thursday.
As part of a one-day pilot program sponsored by the People’s Bank of China, residents of Hong Kong could use the digital currency developed by the central bank to pay for things in nearby Shenzhen, on the other. side of the border between the Special Administrative Region and Guangdong in southern China. Province, according to the public newspaper Shenzhen Special Zone Daily.
The trial, which took place on Tuesday, highlights the PBOC’s interest in expanding testing of its digital currency, which has so far been limited to retail payments on the Chinese mainland.
In early December, the Hong Kong Monetary Authority, or HKMA, Hong Kong’s de facto central bank, announced that it was preparing for a “technical pilot test” of the digital yuan for cross-border payments in conjunction with the PBOC.
Because the yuan is already widely used in Hong Kong, the digital version of the currency, designed to replace cash, will bring greater convenience to tourists to Hong Kong and mainland China by providing an additional payment option to those who need to cross-pay. border shopping, said Eddie Yue, managing director of HKMA, in an article announcing the collaboration.
In 2019, Hong Kong remained the largest offshore market for the yuan, settling 44.9% of cross-border yuan payments and receipts, or 8.83 trillion yuan ($ 1.3 trillion), according to the latest report. BPC RMB Internationalization Annual Report, released in August. Hong Kong’s settlement figure far exceeds the 10.3% share of finalist Singapore.
Hong Kong residents who regularly travel to Shenzhen can register a digital wallet with a daily transaction limit of up to 50,000 yuan, after verifying their identity with their mainland travel permit, according to the newspaper report.
In addition, Hong Kong people who occasionally visit Shenzhen and do not have a mainland travel permit can use their Hong Kong phone number to open a digital wallet that allows anonymous payments down to a smaller total, the report says. report.
The pilot program is also part of China’s recently released five-year plan, a master plan for the country’s economic and social development for 2021 to 2025. The plan includes a proposal to “regularly promote research and development. digital currency “.
China is accelerating the deployment of its virtual yuan. Since October, several cities, including Shenzhen, have used the digital currency to provide millions of yuan in coupons to local residents under ongoing pilot programs.
Over the next few years, policymakers plan to expand digital yuan testing in several regions, including the Guangdong-Hong Kong-Macao Greater Bay Area, according to a plan released in August by the Commerce Ministry.
The PBOC Digital Currency Research Institute has also joined the HKMA Digital Currency Research Project to facilitate cross-border payments at the wholesale level and address issues associated with cross-border remittances, including inefficiencies. , high costs and complex regulatory compliance.
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Caixinglobal.com is the English-language online news portal for Chinese financial and business news media group Caixin. Nikkei has agreed with the company to exchange items in English.
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