While the world has become obsessed with DeFi, NFT, and rising cryptocurrency prices, China continued to quietly test its CBDC, the so-called digital yuan. In fact, it started moving forward with testing quite quickly and recently began testing regarding cross-border payments.
As far as is known, the Digital Currency Institute of the People’s Bank of China conducted these tests in collaboration with the Hong Kong Monetary Authority, whose staff confirmed that the first phase of the tests was completed. More importantly, they confirmed that the tests were successful.
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The same sources shared that the tests involved several different parties, such as merchants and a bank chosen by the authorities. More than that, the Hong Kong Monetary Authority also hinted that the next phase of testing is underway right now.
The statement says that,
We have tested related app usage, system connectivity, and certain use cases, such as cross-border shopping. We are discussing and collaborating with the PBOC on the next phase of technical testing, including the feasibility of expanding and deepening the use of e-CNY for cross-border payments.
HKMA has also been part of a number of other collaborative efforts to explore the possibility of issuing a CBDC. In fact, he has been exploring this idea since 2017, participating in both local and international projects. PBoC is just one of its partners, and some others include the Central Bank of the United Arab Emirates, as well as the Bank of Thailand.
The digital yuan, as a large-scale instant payment system created by the government, rather than the private sector, has enormous potential to be adopted internationally by some of the largest companies. Not to mention the world’s national population, which is increasingly connected.
As such, it will help provide a fast, economical and efficient transaction system around the world.