• China has begun a „cross-border“ digital yuan pilot with Hong Kong.
• The event is the brainchild of the central People’s Bank of China (PBoC) and the Luohu District local government.
• Transactions are capped at 999 yuan, and similar pilots are planned for Macau.
China Launches Digital Yuan Pilot with Hong Kong
Shenzhen, China has commenced a retail-focused “cross-border” digital yuan pilot with Hong Kong. The event is a joint effort by the central People’s Bank of China (PBoC) and the Luohu District local government.
Token Giveaway
As part of promoting this initiative, almost $1.5 million tokens will be given away in Luohu during the course of the event. Recipients will be able to spend their digital yuan holdings in multiple sectors such as restaurants, hotels, supermarkets, jewelry and home appliances – but transaction sizes are capped at 999 yuan (around $145).
Cross-Border Credentials
The PBoC had earlier stated that the digital yuan was intended as an M0 cash/bank card alternative – not for international trade. But recently their views on its cross-border payment credentials have changed; should these trials prove successful across both Hong Kong and Macau, then there may be scope to expand its use further still. Furthermore, Russia has expressed interest in using this coin to trade with Beijing if they can develop suitable interoperability solutions for its own digital ruble currency.
Promotion Activities
The PBoC branch located in Shenzhen has invested around $83 million on promotional activities such as token giveaways to promote usage of the token. This includes those based in Hong Kong, Macau and Taiwan who have access to a digital yuan wallet serviced by Industrial Bank since September last year.