China has just successfully completed a trial for permitting residents of Hong Kong to use the digital renminbi to complete tax payments on the mainland.
A Mr. Chen – a resident of Hong Kong who runs a business in Shenzhen, recently paid his personal income taxes in Shenzhen by means of the digital renminbi, according to a 1 November report from Securities Daily.
According to the report the transaction marks the first time that a Hong Kong resident has paid for taxes in Shenzhen via the digital renminbi.
Shenzhen first launched trials to allow Hong Kong residents to make cross-border payments in the digital renminbi in March of this year.
Following the success of the trials, Hong Kong residents can now use their Hong Kong phone numbers to register digital renminbi wallets, and use these wallets for small-sum purchases as well as for payments via POS machines in Shenzhen.
The move has greatly reduced the cost and increased the convenience for Hong Kong residents to make purchases in the adjacent city of Shenzhen.
At the 2021 Financial Street Forum that recently concluded in Beijing, Eddie Yue, chief executive of the Hong Kong Monetary Authority (HKMA), said that the authority would “continue to cooperate with the People’s Bank of China to drive the testing of digital renminbi technology in Hong Kong, in order to enable residents of both Hong Kong and the mainland to obtain convenient cross-border payments services.”