Hong Kong is actively testing China’s digital yuan — the country’s central bank digital currency in trial — and has already entered the second phase of technical testing to incorporate a predominant local payment system, a government official said today.
Christopher Hui, Secretary for Hong Kong’s Financial Services and the Treasury, said at a fintech event today that the Hong Kong Monetary Authority, the region’s de facto central bank, and the People’s Bank of China have completed the initial technical tests for cross-border payments using the digital yuan in Hong Kong.
«Currently, they are conducting the second phase of the technical trial, involving more Hong Kong banks and testing the digital yuan wallet’s top-up function through the Faster Payment System,» Hui said.
The Faster Payment System is a payment infrastructure the HKMA introduced in 2018. It allows for cross-bank Hong Kong dollar or Chinese yuan payments by simply entering the mobile phone number or email address of the recipient.
In the second quarter of this year, the FPS processed about HK$1 billion of Hong Kong dollar payments, up from HK$669.6 million in the same period last year, according to data from Hong Kong Interbank Clearing Limited.
Hui added that the digital yuan — or the e-CNY — is expected to «provide a secure, convenient and innovative option for cross-border retail consumption for residents in both regions.»
«It will enhance the efficiency of cross-border payment services and user experience, promoting connectivity in the Greater Bay Area of Guangdong, Hong Kong and Macau,» he continued.
E-CNY’s potential boost for industry synergy
Eric Jing, chairman and chief executive officer of Ant Group, a fintech affiliate of Chinese internet conglomerate Alibaba, said today at a conference in Shanghai that the value of the digital yuan for the industrial internet is similar to what mobile payments brought to the consumer internet, Chinese tech media 36Kr reported.
Jing said that the most significant feature of the digital yuan would be its programmability, which allows for cross-chain communication and enables automatic delivery.
«This will bring about substantial synergies within the industry,» Jing added.