Chinese Central Bank to Expand Digital Yuan Pilot in Hong Kong

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By BitcoinWiki News

Key Takeaways:

  • The People’s Bank of China plans to expand its “cross-border” digital yuan pilot in Hong Kong
  • Deputy Governor Xuan Changneng stated that the bank wants to “deepen the cross-border e-CNY pilot” in Hong Kong to boost convenience for firms based in both Hong Kong and Mainland China
  • The PBoC and the HKMA plan to collaborate on new policy measures to drive CBDC adoption, including new CBDC-powered financial services and cooperation measures
  • Areas of cooperation include providing support for institutions participating in the pilot, increasing convenience for digital yuan users, expanding the number of banks handling the e-CNY, and developing digital yuan services in line with the habits of Hong Kong residents
  • The PBoC and the HKMA will also work to promote the interoperability of digital yuan and Hong Kong payment systems
  • A Shanghai court has issued a verdict in the first instance of money laundering involving Chinese digital yuan and cryptocurrency
  • The PBoC’s Digital Currency Research Institute launched its first digital yuan cross-border payment pilot project at the end of 2020 and has made progress by launching a connection to Hong Kong’s Fast Payment System network
  • Major Mainland players like JD.com and the Commercial Bank of China have joined cross-border digital yuan projects, and some major Hong Kong-based banks, such as HSBC, have begun offering clients digital yuan services
  • Bitcoin (BTC) is not directly mentioned in the text

1. Introduction
The People’s Bank of China (PBoC) plans to expand its “cross-border” digital yuan pilot in Hong Kong in order to boost convenience for firms based in Hong Kong and Mainland China.

2. Areas of Cooperation
The PBoC and the Hong Kong Monetary Authority (HKMA) plan to cooperate in several areas to expand the reach of the e-CNY. This includes providing support for institutions participating in the pilot, increasing convenience for digital yuan users, expanding the number of banks handling the e-CNY in Hong Kong, and developing digital yuan services more in line with the habits of Hong Kong residents.

3. New Services and Use-Case Scenarios
The PBoC and the HKMA also aim to expand service and use-case scenarios for Hong Kong-based firms and individuals, as well as explore new digital yuan-powered cross-border remittance services for micropayments. They also plan to promote the interoperability of digital yuan and Hong Kong payment systems.

4. Legal Precedent
A Shanghai court has issued a verdict in the first instance of money laundering involving Chinese digital yuan and cryptocurrency, setting a significant legal precedent for crypto-related crimes in China.

5. Progress and Partnerships
The PBoC’s Digital Currency Research Institute launched its first digital yuan cross-border payment pilot project in 2020 and has since stepped up the pilot’s progress by launching a connection to Hong Kong’s Fast Payment System network. Major players like JD.com and the Commercial Bank of China have also joined cross-border digital yuan projects, while some major Hong Kong-based banks, such as HSBC, have begun offering clients digital yuan services.

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