Recently, Hong Kong Financial Secretary Paul Chan released a statement saying the city is committed to developing digital versions of the Hong Kong dollar and Chinese yuan to improve its retail and cross-border payments.
Chan also added that in the following years, Hong Kong will implement frameworks and policies to prepare the city for wide-scale use of Central Bank Digital Currencies (CBDCs).
CBDCs are digital currencies issued by governments and give authorities more control compared to cryptocurrencies, which are decentralized.
The secretary also said that Hong Kong will closely work with the People’s Bank of China to test digital RMB (e-CNY) and improve its cross-border payment capabilities.
Last December 2020, the Hong Kong Authority and the Digital Currency Research Institute at China’s Central Bank held a meeting to discuss the initial testing of e-CNY for cross-border payments.
For its part, the Hong Kong Monetary Authority has conducted small-scale test runs with the help of the Bank of China Hong Kong.
The Hong Kong government has been making efforts to make cryptocurrency adoption as easy as possible for its residents.
Today, city residents can easily register digital yuan wallets just through their Hong Kong phone numbers and their wallets can be immediately used in retail stores located in Shenzhen’s Luohu District.
Hong Kong is also working with the United Arab Emirates and Thailand in developing a CBDC project which would allow their digital currencies to “cross” on their central banks’ jurisdictions.
The project, which is called “Multiple CBDC Bridge”, will utilize distributed ledger technology that would provide a seamless and highly secured cross-border transaction on the three countries’ digital currencies.
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