Hong Kong-based enterprises have achieved a milestone by conducting the first “cross-border” commodity payments using Mainland China’s digital yuan, marking a significant step in the internationalization of the Central Bank Digital Currency (CBDC).
The Bank of China (Hong Kong) facilitated the “Enterprise Digital RMB Cross-border Transaction Pilot” in collaboration with its Mainland-based parent company. The pilot witnessed the successful processing of approximately $3.4 million in payments by Hong Kong and Mainland firms.
While previous Hong Kong-Mainland CBDC pilots primarily focused on retail applications in areas such as duty-free shopping and public transport, the Bank of China’s initiative breaks ground in the business-to-business (B2B) sector. This development follows similar explorations of e-CNY usage scenarios by companies in Singapore and Taiwan.
In the pilot, an importer utilized the digital yuan to pay for a shipment of iron ore, covering the entire transaction in e-CNY. The Bank of China (Hong Kong) emphasized that it has established fundamental capabilities for local enterprises interested in utilizing the digital yuan for trading with Mainland companies. These capabilities include services like digital yuan wallet opening, transfer, and redemption.
The bank highlighted that the use of CBDC would not only reduce cross-border settlement costs for enterprises but also enhance transaction efficiency. It expressed its commitment to expanding its range of CBDC services to support more corporate customers engaged in cross-border settlements using the digital yuan.
In recent weeks, there have been indications that additional Hong Kong-based banks, including major institutions like HSBC, Hang Seng, and Standard Chartered, are poised to join the e-CNY pilot, contributing to the broader expansion of digital yuan initiatives.
This successful pilot demonstrates the potential for digital yuan to play a pivotal role in facilitating cross-border transactions and trade, underlining its growing influence in the global financial landscape.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Individuals should conduct thorough research and exercise caution when considering investments or financial transactions.