The Chinese Central Bank is set to expand its digital yuan pilot program in Hong Kong

The Chinese Central Bank is set to expand its digital yuan pilot program in Hong Kong, aiming to deepen cross-border cooperation and enhance convenience for businesses operating in both Hong Kong and Mainland China. Xuan Changneng, Deputy Governor of the People’s Bank of China (PBoC), announced plans to collaborate closely with the Hong Kong Monetary Authority (HKMA), the region’s central bank and financial regulator, to promote the adoption of Central Bank Digital Currency (CBDC).

The expansion of the digital yuan initiative will include various policy measures aimed at facilitating CBDC adoption, such as the introduction of new financial services powered by digital yuan and enhanced cooperation efforts between the PBoC and HKMA.

Key areas of cooperation between Mainland China and Hong Kong include providing support for institutions participating in the pilot program, improving user convenience, expanding the network of banks handling digital yuan transactions, and exploring new cross-border remittance services for micropayments. Additionally, efforts will be made to increase the number of merchants accepting digital yuan payments in Hong Kong and develop services tailored to the preferences of Hong Kong residents.

Furthermore, the PBoC and HKMA will work towards enhancing interoperability between the digital yuan and Hong Kong’s payment systems. The PBoC initiated its digital yuan cross-border payment pilot project in late 2020 and has since made significant progress, including integrating with Hong Kong’s Fast Payment System network. Major players from Mainland China and Hong Kong, including JD.com, the Commercial Bank of China, and HSBC, have also joined cross-border digital yuan initiatives, signaling growing interest and participation in the program.