The HKMA and the Digital Currency Institute of People’s Bank of China are discussing the technical pilot testing of using e-CNY, the digital renminbi issued by the PBOC, for making cross-border payments, and are making the corresponding technical preparations, according to a statement.
“As the renminbi is already in use in Hong Kong and the status of e-CNY is the same as cash in circulation, it will bring even greater convenience to Hong Kong and Mainland tourists,” Eddie Yue, the chief executive said in a statement.
While there is not yet a timetable for the launch of e-CNY, it will certainly offer an additional payment option to those in Hong Kong and the Mainland who need to make cross-border consumption.
The HKMA has also done the first phase of pilot-testing of cross-border payment with Thailand under its Ithanon-Lion Rock project.
“Last year, the HKMA launched a joint research project with the Bank of Thailand to address the various cross-border payment issues by using central bank digital currencies (CBDC) and a blockchain platform,” Yuen said. “The research project has entered its second stage, including exploring specific business applications as well as the operability and scalability of the platform to allow the participation of three or more CBDCs.”
He said that the domestic bank transfers are already very efficient but the goal is now to make sure that the cross-border payments can be done with a “blink of an eye.”
He said cross-border payments are currently mired in inefficiencies and hence expensive and slow. The goal is to rectify them to tackle the challenges of making cross-border transfers as efficient as domestic transfers.