Hong Kong to test linking China’s digital yuan with its domestic payments network

Hong Kong is to test connecting China’s digital yuan with its domestic payments network, officials said on Tuesday, the second stage of trials of China’s digital currency in the financial hub.

China’s e-CNY is one of the most advanced central bank digital currency (CBDC) projects among major economies. Chinese officials say the project will be initially domestically focused, but cross-border trials are also under way in Hong Kong.

Countries around the world are looking at developing CBDCs to modernise their financial systems, ward off the threat from cryptocurrencies and speed up domestic and international payments.

This latest trial will explore how Hong Kong residents can top up an e-CNY digital wallet using the city’s faster payment system, currently used to make domestic payments via mobile phones.

“This will help Hong Kong residents to use e-CNY when they cross the border,” Nelson Chow, chief fintech officer of the Hong Kong Monetary Authority (HKMA), told a media briefing on Tuesday, as the regulator launched several other fintech initiatives.

An earlier small-scale trial explored using e-CNY digital wallets in Hong Kong.

The HKMA also said on Tuesday it would issue a paper exploring the feasibility of issuing a retail-focused CBDC, an e-HKD, within 12 months. The paper will consider potential use cases, as well as data privacy, and anti-money laundering standards among others.

The regulator had previously said it was focused on using CBDCs as a way of streamlining cross border interbank payments.

“People are now a lot more used to digital payments, and if other central banks are exploring possible use cases for CBDCs… you have to try out to see whether you can make it successful,” Eddie Yue, HKMA’s chief executive, said at the same briefing.

The HKMA’s trials of cross-border interbank CBDCs continue alongside the other consumer-focused projects, and earlier this year, China and the UAE’s central banks joined an HKMA and Bank of Thailand wholesale CBDC pilot.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.