Hong Kong’s Greater Bay Area (GBA) will soon become the testing ground for China’s Digital Currency Electronic Payment (DCEP) project, local news outlet Southern Daily reported on 12 August.
Hong Kong’s GBA could prove to be a great testing spot for China’s upcoming digital yuan, considering it is a megapolis consisting of nine cities, among which are Guangzhou, Shenzhen, Hong Kong, and Macay. Having a combined population of over 69 million people, the financial and technological hub has been able to achieve a GDP of around $1.5 trillion.
The director of the Local Financial Supervision Administration Bureau of Guangdong Province, He Xiaojun, has also stated that the Guangdong region will play a large role in the cross-border adoption of China’s CBDC. Noting that the province will play a crucial role in providing virtual banking to Hong Kong, Xiaojin added:
“Guangdong will further encourage innovation, deepen business integration with Hong Kong and Macao in virtual banking and other aspects, break through data barriers, and innovate. The use of digital currency scenarios allows modern financial technology to better serve the construction and development of the entire Greater Bay Area.”
Presenting itself as the “most open and international city” in the GBA, Hong Kong plays the role of an “international financial, transportation, trade centres and aviation hub”. By taking advantage of the “one country, two systems”, the city plays an important role in the development of the GBA, by enhancing the role and functions of the economic area.
Although we still have no confirmed launch date for China’s CBDC, the project has been in development for years now. China’s DCEP is already undergoing trial tests in the cities of Shenzhen, Suzhou, Xiongan, Chengdu and the future site of the winter Olympics. Reports also show that several of the largest firms in the country are already talking to the People’s Bank of China (PBoC) in an attempt to be among the first to conduct real world tests of the digital currency.