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Digital Yuan tests: China and Hong Kong test cross-border digital Yuan

Digital Yuan

TL;DR Breakdown

  • Chinese CBDC used for transactions across border.
  • PBoC calls for cooperation and world-wide interoperability.

Digital Yuan makes debut cross-border transaction

China successfully completed a first international test of its CBDC. The pilot test was carried out between China and Hong Kong. An official at the Peoples Bank of China (PBoC), Wang Xin, said that the PBoC and their Hong Kong counterpart had carried out international transactions using the Chinese digital Yuan.

According to reports from Sina Finance, this announcement was made at a press conference at the State Council Information Office of China.  The announcement is coming on the heels of a proposal last week by Mu Changchun, who is in charge of Digital Currency Research Institute at the Chinese central bank, for guidelines to be adopted for national digital currencies globally.

PBoC official calls for global interoperability

Mu urged the governors of central banks to work towards the interoperability of central bank digital currency (CBDC) globally. He made this known at a seminar organized by the Bank for International Settlements seminar.

He said there should be interoperability among various CBDCs. Mu said Beijing had sent a MoU to other apex banks and regulators.

This news is a follow up on Beijing’s push towards achieving a CBDC. Since April 2020 when it launched its digital Yuan, PBoC has energetically pushed to take its CBDC concept across China and beyond. Based on this, they had collaborated with the central banks of UAE, Thailand and Hong Kong to fashion out an international national digital currency transaction two months ago. Two years ago, an official of the Hong Kong central bank said they and PBoC were at the beginning phase of international digital Yuan tests.

As we earlier reported, the participating central banks would research some of the following: inter-payment settlement of international CBDC transactions and domestic and foreign currencies exchanges in international trading scenarios.

Kamsi King

Kamsi King

King Kamsi is a fintech and digital currency writer and enthusiast. He is keenly interested in blockchain and cryptocurrency and their global adoption. When not busy with writing, he can be found hobnobbing in forums with the best minds in crypto, both developers and startup founders.

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