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China digital currency: China, Hong Kong begin testing digital yuan as Beijing ramps up research into cross-border use
- The People’s Bank of China and the Hong Kong Monetary Authority have begun ‘technical testing’ for cross-border use of the digital yuan
- International collaboration has also accelerated between China’s central bank and its counterparts in Thailand and the United Arab Emirates
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China will expand cross-border use of its sovereign digital yuan “when the time is ripe”, with technical testing already under way with Hong Kong, the country’s central bank has said.
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China is a world leader in the development of a central bank digital currency (CBDC), with 200 million yuan (US$30.4 million) already distributed in pilot projects across the country, including in cities like Shenzhen, Suzhou and Beijing.
Although China’s sovereign digital currency, the so-called Digital Currency Electronic Payment (DCEP), is designed largely for small retail purposes, cross-border application is feasible, Wang Xin, head of the People’s Bank of China (PBOC) research bureau, said on Thursday.
“When conditions are ripe and market demand calls, cross-border transactions in digital yuan can be settled,” he told a media briefing in Beijing.
The PBOC’s digital currency research institute and the Hong Kong Monetary Authority have begun testing it for cross-border use, Wang said.
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