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China’s ongoing development of the digital yuan

China's ongoing development of the digital yuan

Hong Kong is about to expand Pilots for cross-border use of the digital yuan. According to the Hong Kong Monetary Authority, the first phase of digital yuan tests across the border has been successful.


Hong Kong Monetary Authority


People Bank of China’s digital currency Institute and the Hong Kong Monetary Authority are making a quick move forward with their joint testing of the digital yuan for cross-border payments. ACCORDING TO BLOOMBERG, the HKMA staff also confirmed that the first phase of testing for the currencies cross-border use had been a huge success this week.


Initial Tests


However, PBOC included several parties in the initial tests that included selected merchants and a bank designated by the mainland Chinese authorities. According, to HKMA the plans for the next phase of Pilots are already underway.

Next Phase


In addition, he said that they had tested the use of the related app, system connectivity, and some use cases like cross-boundary purchases. They are still discussing the collaboration with the PBOC for the next phase of testing. This includes the feasibility of broadening and deepening the use of e-CNY for all cross-boundary payments.

CBCDs


The Central Bank digital currency has set an ambitious pace for global research of CBDCs worldwide. Michael Ho is the principal of financial services at Oliver Wyman and co-author of the digital yuan report. However, according to Ho significance of China’s new currency lies less in the mere fact of digitalization.

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