We had posted comments on an article a few weeks back in these pages concerning central bank digital currencies and the consortium of Asian banks looking to conduct cross-border tests in the upcoming months. This referenced posting at Shine indicates that trials are underway between the HKMA and the Digital Currency Institute arm of the PBC. However, it depends upon how one defines trial since upon reading it seems that planning and design is underway, not any real testing just yet.
‘The Hong Kong Monetary Authority said it is working with the People’s Bank of China to study the technical test of cross-border payment using digital yuan and make corresponding technical preparations…Specifically, the authority is working with the Digital Currency Research Institute, the arm of the central bank in charge of minting the country’s sovereign digital currency to study the use of e-yuan for cross-border payment technology testing, according to Eddie Yue Wai-man, chief executive of the HKMA.’
Again we covered this general topic recently in memberresearch and see the cross-border effort as key to longer term adoption efforts of CBDCs, given the rate of innovation in that space during the past couple of years. There seems to be substantial progress in Asia on these digital currencies with China and Hong Kong leading the way.
‘The progress came as Beijing is eyeing global digital currency use to internationalise the yuan and the HKMA is looking to apply new technologies to address long-standing pain points in banking, international remittances in particular….“The process is currently slow and costly, but CBDCs have a range of promising applications and, together with our partner central banks, we want to be at the forefront of this development,” Yue said in a keynote speech at the Asian Academy of International Law Conference in February….As the status of the e-yuan is the same as cash in circulation, it will offer an additional payment option to those in Hong Kong and the mainland who need to make cross-border consumption and bring even greater convenience to tourists, the Hong Kong official said previously.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group