Hong Kong is actively engaged in testing China’s digital yuan, the central bank digital currency currently in trial, and has progressed to the second phase of technical testing aimed at integrating it with a widely used local payment system, media reports said.
Christopher Hui, the Secretary for Hong Kong’s Financial Services and the Treasury, made this announcement during a fintech event. He revealed that the Hong Kong Monetary Authority (HKMA), the region’s de facto central bank, in collaboration with the People’s Bank of China, has successfully completed initial technical tests for cross-border payments using the digital yuan within Hong Kong.
Hui stated, “Currently, they are conducting the second phase of the technical trial, involving more Hong Kong banks and testing the digital yuan wallet’s top-up function through the Faster Payment System.”
The Faster Payment System, introduced by the HKMA in 2018, facilitates cross-bank transactions in Hong Kong dollars or Chinese yuan by simply using the recipient’s mobile phone number or email address. In the second quarter of this year, the FPS processed approximately HK$1 billion in Hong Kong dollar payments, a significant increase from HK$669.6 million during the same period the previous year, as reported by Hong Kong Interbank Clearing Limited.
Hui also highlighted the potential benefits of the digital yuan, also known as e-CNY, which is expected to offer a secure, convenient, and innovative solution for cross-border retail transactions for residents in both regions. He emphasized that it would improve the efficiency of cross-border payment services, enhance user experiences, and promote connectivity within the Greater Bay Area of Guangdong, Hong Kong, and Macau.
