China Needs HongKong Digital Yuan Success
As HongKong is still the crossroads of international trade in Asia, the Chinese government needs the roll out of its Digital Yuan to be a success there of all places. Gioven that HongKong is not exactly the most subservient city under Chinese rule (understatement of the year) finding loyal local fans for the digital coins is proving hard.
However, China is determined to make it work. Because of this, the Hong Kong Monetary Authority (HKMA) has now admitted that talks with the People’s Bank of China’s Digital Currency Institute have commenced. HongKong itself is still a big fan of Bitcoin and not too eager to accept anything from mainland China, but in this matter it probably has no choice.
Hong Kong In Talks With People’s Bank Of China On Digital Currency Trial For Cross-Border Payments— XRPcryptowolf (@XRPcryptowolf) December 7, 2020
Hong Kong Monetary Authority, the city’s Central Bank, said it is working with the PBOC to test Digital Yuan use caseshttps://t.co/foT3a4aWlh
The CEO of the Hong Kong Monetary Authority, Mr Eddie Yue, said:
As the renminbi is already in use in Hong Kong and the status of e-CNY is the same as cash in circulation, it will bring even greater convenience to Hong Kong and Mainland tourists.
China's Central Bank plans Digital Currency pilot for cross-border payments to Hong Kong— XRPcryptowolf (@XRPcryptowolf) December 5, 2020
Preliminary talks are underway to begin testing the Digital Yuan in the special administrative region of Hong Konghttps://t.co/fARvOOyUZR
While there is not yet a timetable for the launch of e-CNY, it will certainly offer an additional payment option to those in Hong Kong and the Mainland who need to make cross-border consumption.
Furthermore, the Chinese authorities are apparently also testing cross border payments for the Digital Yuan with Thailand already. Mr Yue admitted:
The research project has entered its second stage, including exploring specific business applications as well as the operability and scalability of the platform to allow the participation of three or more CBDCs
Push against dollar dominance
There is much speculation as to why China is so eager to push for the quick roll out of the Digital Yuan, but a recent article published in China Finance, a magazine run by the People’s Bank of China (PBOC), might have the answer. In fact, it is now admitted that China is eager to stop the dollar’s dominance as the favored coin in the Asian region for trade and therefore wants the Digital Yuan to be a success.
The article stated:
China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track.