Shenzhen, China has initiated a “cross-border” digital yuan test program with Hong Kong.
China Banking and Insurance News said that the central People’s Bank of China (PBOC) and the Luohu District local administration conceived of the event. Luohu is situated near the New Territories of Hong Kong.
The PBoC and Luohu are promoting the event by giving free tokens. Around $1.5 million worth of tokens will be distributed at the event in Luohu. Recipients of tokens would be able to spend their digital yuan in “various industries.” According to reports, they include restaurants, hotels, supermarkets, jewellery, and household appliances.
Nevertheless, the PBoC has restricted transactions to 999 yuan. Macau is also planning similar pilots. The People’s Bank of China has previously said that the digital yuan is meant as an alternative to “M0” currency and bank cards, and not as a tool for foreign commerce.
In recent months, this narrative seems to have evolved, with the PBoC promoting the token’s potential cross-border payment credentials. If the Hong Kong and Macau pilots are successful, the People’s Bank of China may consider expanding the usage of the coin.
The digital yuan looks to be gaining popularity in Russia. Moscow might utilize the token to do business with China, especially if it is able to build interoperability solutions for its impending digital ruble.
A large commercial bank, Industrial Bank, introduced a digital yuan wallet service for consumers in Hong Kong, Macau, and Taiwan in September of last year.
According to Shanghai Securities Daily, the Shenzhen branch of the PBoC has, in concert with local bodies, spent around $83 million on digital yuan giveaways and other promotional activities for the token.
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