In what is certainly a massive development for China’s Central Bank Digital Currency (CBDC), the Hong Kong Monetary Authority (HKMA) has announced a brand new pilot program to enable the usage of the digital yuan (e-CNY) in cross-border payments. The development could have massive ramifications for the asset’s expanded presence.
The success of such a pilot program could further increase the international reach of digital currency. Moreover, the May 17th announcement will seek to increase safety, security, convenience, and innovation in the CBDC’s cross-border payments between Hong Kong and Mainland China.
Also Read: BRICS: China Exploring Cross-Border Use of Digital Yuan
Hong Kong Digital Yuan to Enter Cross-Border Pilot
Throughout the last few years, the prominence of CBDCs has become an increasing facet of the finance sector. Indeed, a plethora of nations across the globe have sought to implement projects to embrace the growing trend. Now, one of the most successful countries in the development of a digital currency is seeking to expand its relevance.
Amid the BRICS bloc’s embrace of digital currencies, China’s CBDC is set to get a massive boost as the HKMA announced its digital yuan would embark on a pilot program to test its cross-border payment capabilities. Indeed, the announcement arrived after China began exploring cross-border potential in November of last year.
Also Read: BRICS: Digital Yuan Opens The Door for a Dollarless Future
The project will also encourage Hong Kong residents to set up their own e-CNY wallets using mobile phone numbers. However, the plan does prohibit peer-to-peer transactions between citizens. Still, it is a step in the right direction for the growing usage of the digital currency.
The plan will allow Hong Kong citizens to fund wallets with digital yuan through a variety of retail banks. Additionally, the HKMA has stated its plans to continue upgrading e-CNY wallets through a tier program. Moreover, the plan will seek to implement support for corporate use cases regarding cross-border payments.