Mu Changchun, director-general of the People’s Bank of China’s digital currency institute, said today the central bank is working with the Hong Kong Monetary Authority (HKMA) to test cross-border payment features for the e-CNY, China’s much anticipated central bank digital currency (CBDC).

Fast facts

  • Mu said at a webinar, jointly organized by the PBOC and the HKMA, that the central bank has launched a collaborative project with the HKMA to “explore the feasibility of using CBDC to improve cross-border payments.”
  • The PBOC official said the team has run through preliminary technical tests with a limited number of Hong Kong residents who could create e-CNY wallets with basic features, such as top-up, transfer and payment with certain merchants.
  • “Now we’re entering the phase-two research — that is to explore the approaches for interlinking the e-CNY and the Faster Payment System in Hong Kong,” Mu said, adding that it could further improve the payment efficiency without changing local residents’ payment habits. Mu hopes in the future, for mainland tourists traveling to Hong Kong, they could make payments to local merchants with e-CNY while the merchants could receive directly in HKD.
  • Meanwhile, central banks of China, Hong Kong, Thailand and the United Arab Emirates are actively pushing ahead with the development of the multiple CBDC Bridge (mBridge) project — a multiple central bank digital currency platform. Mu said the project team has finished the first-phase development of the trial platform that’s successfully tested under use cases of international trade, “with sample transactions spanning 11 industries in the four jurisdictions in transaction value exceeding 2 billion [yuan] (US$315 million).”
  • In November, authorities said at Hong Kong Fintech Week that testing of sample trade settlement transactions has already started on the mBridge platform and is expected to enter the pilot stage in 2022.
  • The Beijing Winter Olympics will open on Feb. 4, which Chinese authorities regard as an essential step for the e-CNY, with the expectation that participants from all over the world may use the digital yuan at Olympics venues. In Beijing, four state-run banks released a new batch of the e-CNY coupons last week to promote its adoption rate in rehearsal for the upcoming Winter Olympics.