The Hong Kong Monetary Authority (HKMA) and the Peoples Bank of China (PBOC) expanded the scope of their cross-border digital yuan pilot to allow the use of e-CNY wallets by Hong Kong residents.
The digital yuan is China’s central bank digital currency (CBDC). China has been piloting the digital yuan for several years and is among the most advanced of the countries around the world that have been exploring the applications of digital version of their currencies.
Adopters will be able to set up the wallets using just a phone number, and use them for so-called cross-boundary payments, such to retailers, but not for person to person transfers, the HKMA said in a press release on Friday. The wallets can be used in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and other areas of mainland China where the pilot is running.
Users will be able to pay merchants directly from the wallets without needing to set up a mainland bank account, HKMA CEO Eddie Yue said in the statement. They are able to top up their wallets in real time through 17 Hong Kong retail banks using the Faster Payment System (FPS).
The HKMA intends to continue working with the PBOC to expand the application of the e-CNY. The HKMA plans to work with the Digital Currency Institute to explore including features like name verification, enhancing interoperability in payments and corporate use cases, such as cross-border trade settlement.
China and Hong Kong said they had successfully carried out the first phase of cross border digital yuan trials in December 2021 and entered a second phase following initial talks a year earlier.
The special administrative region has also been testing its own CBDC, the e-HKD, which entered the second phase of its pilot in March.
Read more: Hong Kong Starts New Phase of CBDC Testing
Edited by Sheldon Reback.
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Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.
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