Hong Kong Bolsters China’s CBDC Pilot with Local e-CNY Wallets

Hong Kong residents to explore China’s CBDC in cross-border payments.

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  • China has made further progress in its CBDC pilot.
  • The digital yuan will now be tested for cross-border payments.
  • The expanded pilot scope will feature a specific region.

Hong Kong residents can now set up individual e-CNY wallets and use mainland China’s experimental central bank digital currency (CBDC) for cross-border payments, authorities announced on Friday.

China became the first major economy to test a digital currency when it began pilots in Shenzhen, Suzhou, Xiongan, and Chengdu in April 2020. As of the end of June 2023, Chinese residents had transacted 1.8 trillion yuan ($249.27 billion) using e-CNY.

e-CNY Top-Up and Cross-Border Payments

According to a press release dated May 17, the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) will facilitate users’ testing of cross-border digital yuan payments through personal e-CNY wallets.

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“With the expansion of the pilot scope, users can now set up e-CNY personal wallets in Hong Kong, which requires only their Hong Kong mobile phone numbers.  The e-CNY wallets can be used for cross-boundary payments but cannot be used for person-to-person transfers,” the statement read.

The expanded pilot scope will allow users to top up their e-CNY wallets via the Faster Payment System (FPS) through 17 retail banks in Hong, including Standard Chartered Bank (Hong Kong) Limited, ZA Bank Limited, and Airstar Bank Limited.

While the expanded pilot focuses on the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), the authorities said Hong Kong residents can also use the digital currency in their e-CNY wallets in other mainland areas.

“Progress is being made on the interoperability of e-CNY with traditional e-payment service providers in the Mainland, which would also provide more consumption choices to Hong Kong residents in the future.” HKMA said.

Per the statement, the HKMA will continue collaborating with the Digital Currency Institute (DCI) of the PBoC to explore digital yuan corporate use cases and upgrade the e-CNY wallet to “higher tiers“ through real-name verification.

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Read why China recently probed digital yuan architect Yao Qian:
China Probes Digital Yuan (CBDC) Architect Yao Qian

Stay updated on how HTX’s Hong Kong arm pulled license applications twice:
HTX’s Hong Kong Arm Pulls License Application for a Second Time

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Brian Danga

Brian Danga, a Kenyan crypto reporter, is dedicated to delivering breaking news and updates from the cryptocurrency world. With a background as a Web3 writer and project manager, he recognizes the importance of unbiased reporting. Holding an LLB degree from the University of Nairobi, Brian's analytical skills contribute to his accurate news reporting. His personal interests include cooking, watching documentaries, reading, and engaging in intellectual discussions.