The Chinese central bank and the Hong Kong Monetary Authority (HKMA) are testing out technology to permit the use of the digital renminbi for cross-border payments purposes.
HKMA chief executive Eddie Yue published a report on 6 December stating that HKMA is currently working with the People’s Bank of China (PBOC) Digital Currency Research Institute on the testing of cross-border payments technology for China’s central bank digital currency (CBDC).
“HKMA and PBOC’s Digital Currency Research Institute are currently researching the use of the digital renminbi and conducting tests of cross-border payments technology, as well as making corresponding technological preparations,” wrote Yue.
“The use of the renminbi in Hong Kong is already highly commonplace, and the digital renminbi is being positioned as cash in circulation.
“Its use will provide greater convenience to tourists from either side. While there is still no timetable unveiled for the [official launch] of the digital renminbi, we believe that in future it will provide greater choices in terms of payments methods for residents of either side who need to engage in cross-border retail consumption.”
Yue said that while the domestic payments services of places around the world are already highly digitised, cross-border payments services have always lagged in this regard.
According to Yue other forms of cross-border payments suffer from problems including long waiting times, high costs and low levels of transparency.
Yue said that HKMA is already working with the Thai central bank to research the use of CBDC and blockchain platforms to resolve various cross-border payments problems, and that such research has now entered the “second phase.”
“In future, by deriving assistance from the trend of strengthened international cooperation for cross-border payments, there will be opportunities to develop regional cross-border payments platforms.”