Yesterday Mu Changchun, who heads the Digital Currency Research Institute at the People’s Bank of China (PBoC), said the digital yuan trials between Hong Kong and China have moved into a second phase. This links the Chinese central bank digital currency (CBDC) wallets to Hong Kong’s Faster Payments System (FPS). Mr. Mu was talking at a joint seminar between the PBoC and the Hong Kong Monetary Authority (HKMA).
Recapping on the first phase of the tests, these enabled Chinese visitors to Hong Kong to recharge, transfer and spend money using their digital RMB (eCNY) wallets. Trials involved local Hong Kong banks and a limited set of Hong Kong merchants. In China there were also tests enabling Hong Kong visitors to the Luohu District of Shenzhen to use the digital yuan.
At a BIS event in March this year, Mu Changchun first outlined his “do unto others” principles for cross border CBDC trials. These boil down to do not harm (respect monetary sovereignty), compliance and interoperability, and the Hong Kong trials adhere to these principles.
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