Hong Kong Enterprises Embrace Digital Yuan in Milestone Cross-Border Transactions

In a groundbreaking move, Hong Kong-based companies have executed the first cross-border commodity payments using Mainland China’s digital yuan, marking a significant international stride for the CBDC.

Participating in the Bank of China (Hong Kong)’s “Enterprise Digital RMB Cross-border Transaction Pilot,” several Hong Kong firms collaborated with the Mainland-based Bank of China for this pioneering initiative. Transactions totaling $3.4 million have been processed, showcasing the viability of digital yuan in the business-to-business (B2B) sector.

Unlike previous Hong Kong-Mainland pilots that primarily focused on retail applications like duty-free shopping and public transport, the Bank of China’s pilot breaks new ground in B2B transactions. This development follows similar explorations in e-CNY usage scenarios by firms in Singapore and Taiwan.

The Bank of China emphasized that the digital yuan extends beyond retail payments, offering technical features that provide added value in corporate cross-border payment scenarios. Notably, an importer utilized the digital yuan to settle the entire bulk transaction for a shipment of iron ore.

Looking ahead, the Bank of China (Hong Kong) has established basic capabilities for local enterprises seeking to engage in cross-border trade using e-CNY. These capabilities include digital yuan wallet services, facilitating seamless transactions such as opening wallets, transfers, and redemptions.

Utilizing the digital yuan for cross-border settlements is expected to reduce enterprises’ settlement costs and enhance overall transaction efficiency. The bank envisions expanding its range of CBDC services to cater to more corporate customers interested in leveraging the digital yuan for cross-border transactions.

As the digital yuan gains traction, more Hong Kong-based banks, including major institutions like HSBC, Hang Seng, and Standard Chartered, are anticipated to join the e-CNY pilot, aligning with Beijing’s plans for further expansion. The success of these cross-border commodity payments underscores the digital yuan’s growing influence in international trade and finance.