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Introduction: Survey data show that 80% of the world's central banks are actively studying sovereign digital currencies, of which about 50% are studying both retail and wholesale models, 35% are only studying the retail model, and 15% are only studying the wholesale model.
Ba Shusong, managing director and chief China economist of the Hong Kong Stock Exchange, said at the Asian International Financial Forum on January 18 that the digital RMB could be used in the Guangdong-Hong Kong-Macao Greater Bay Area's "Wealth Management Connect" in the future. "Since the digital RMB is traceable, it is expected to solve problems that originally had to be solved face-to-face under the traditional framework, such as KYC (know your customer). "
The Hong Kong Monetary Authority announced in December last year that it was working with the Digital Currency Research Institute of the People's Bank of China to study technical tests for using digital RMB for cross-border payments and make corresponding technical preparations.
According to a reporter from 21st Century Business Herald, the relevant technical testing is currently limited to the Hong Kong bank designated by the People's Bank of China, namely Bank of China (Hong Kong), which is invited to participate in the testing together with 200 bank employees and merchants to make technical preparations for the use of digital RMB for cross-border consumption.
The continued spread of the epidemic around the world is expected to accelerate the development of global digital currencies. The Bank for International Settlements pointed out in April last year that given public concerns that the new coronavirus may be transmitted through cash, a flexible payment infrastructure, including retail central bank digital currencies, will become more important.
Data released by the Hong Kong Monetary Authority showed that as of the end of last year, the number of registered users of the "Fast Payment System" launched by the HKMA in 2018 had reached 6.9 million. The transaction volume in December last year increased 10 times compared with the initial launch of the system, reflecting that the public is more willing to use virtual and electronic payment systems during the COVID-19 pandemic. Hong Kong is the world's largest offshore RMB center. -Photo by Gan Jun 80% of central banks are actively researching digital currencies
In 2019, the Bank for International Settlements and the Committee on Payments and Market Infrastructures conducted a survey on the current status of research on digital currencies by central banks of various countries. A total of 66 central banks responded to the survey, covering 75% of the world's population and 90% of economic output.
Survey data shows that 80% of central banks around the world are actively studying sovereign digital currencies, of which about 50% are studying both retail and wholesale models, 35% are only studying retail models, and 15% are only studying wholesale models. About 40% of central banks' research and development work has developed from the conceptual research stage to the testing or concept verification stage, and 10% of central banks have launched relevant pilot programs.
Ba Shusong believes that the wholesale model of CBDC (central bank digital currency) is mainly used for large-scale, low-frequency financial transactions between banks or related financial institutions, while the retail model of CBDC focuses on individual needs and is used in daily consumption scenarios.
He pointed out that about 10% of the world's central banks have already reached the pilot stage of digital currency development. If the electronic onshore RMB can be used in the cross-border pilot in the Greater Bay Area, it will promote the internationalization of the RMB. Since digital currency has the characteristics of traceability, it will help enhance the liquidity of the RMB.
Henri Arslanian, PwC Global Crypto Technology Leader, said at the same forum: “The implementation of central bank digital currency can facilitate cross-border payment transactions. Payment will be as convenient as sending a Whatsapp message. The current cost of traditional cross-border payments is as high as 7%. The introduction of digital currency will effectively reduce money laundering and corruption activities. The amount involved in global money laundering is currently equivalent to 5% to 7% of global GDP.”
Hong Kong is the world's largest offshore RMB center. Before the pandemic, the number of mainland tourists visiting Hong Kong each year reached 50 to 60 million. Ba Shusong said that if the electronic onshore RMB can be used in the cross-border pilot in the Greater Bay Area, it will help promote the internationalization of the RMB.
Data from the Bank for International Settlements shows that as of mid-July 2020, at least 36 central banks around the world have announced retail or wholesale CBDC work. Currently, the most advanced CBDC project in the world may be the People's Bank of China's digital currency electronic payment "DC/EP" project. Hong Kong digital currency research project has been preliminarily completed <br />Many guests attending the forum pointed out that as an international financial center, Hong Kong's cross-border central bank digital currency research under the wholesale model is at the international leading level and has attracted widespread attention from the outside world.
Chen Haolian, deputy director of the Hong Kong Financial Services and the Treasury Bureau, pointed out at the forum: "Central bank digital currency can reduce transaction costs and improve transaction efficiency; direct issuance of digital currency by the central bank can reduce the intermediate links involving commercial banks in issuing currency, and facilitate the tracking of transactions, reducing illegal activities such as tax evasion and blackmail activities."
He believes that the pilot program of digital currency by the mainland central bank will provide experience for Hong Kong, and is discussing with the HKMA the cross-border use of electronic onshore RMB, which will help the integration of the Greater Bay Area and provide convenience for Hong Kong residents and mainland tourists. In order to cooperate with new financial technology applications, financial technology talents will be a key link. He pointed out that there are already 600 financial technology companies in Hong Kong, and six local universities also provide relevant courses to train talents. In addition, Hong Kong also has good financial infrastructure to meet the needs of related development.
As early as 2017, Hong Kong had begun research on central bank digital currency and became one of the first regions to join the Bank for International Settlements Innovation Hub. It is reported that at present, Hong Kong Exchanges and Clearing Limited, 19 banks and five other companies will participate in the second phase of the project and conduct a trial operation with actual trade transactions. The research results are expected to be published in the first quarter of 2021.
Bénédicte Nolens, Director of the Hong Kong Center of the Bank for International Settlements Innovation Hub, revealed at the meeting that the project will be expanded to more currencies in the future and more central banks will participate. However, she admitted that since many Asian countries have capital controls, the corresponding cross-border cooperation plan needs to coordinate the participation of various countries and meet different legal and regulatory requirements.
According to a reporter from 21st Century Business Herald, the Inthanon-LionRock project, a joint digital currency research program conducted by the Hong Kong Monetary Authority and the Bank of Thailand, was completed in December 2019. A total of 10 banks from the two places successfully participated in the development of a proof-of-concept prototype based on distributed ledger technology. Hong Kong's HSBC and virtual bank ZA Bank also participated in the above research.
The platform plans to develop a "Thai Baht-Hong Kong Dollar Cross-Border Corridor Network Prototype" based on blockchain distributed ledger technology, which will enable banks in Hong Kong and Thailand to conduct fund transfers and foreign exchange transactions in a peer-to-peer manner, improve the efficiency and transparency of cross-border fund transfers, and reduce reporting procedures and costs. (21st Century Business Herald) |
