HONG KONG, June 8 (Reuters) - 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
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
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
"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
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
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.
(Reporting by Alun John; Editing by Nick Macfie and Bernadette