Beijing launches a new round of digital renminbi pilot projects, Hong Kong, China actively explores the digital Hong Kong dollar

Since the beginning of this year, the digital renminbi pilot has progressed rapidly, and the “10+1” development pattern has basically taken shape. Localities formulate innovative promotion strategies based on local conditions to promote the accelerated implementation of digital renminbi in the C-side and B-side scenarios. At the same time, the frequency of users’ use of digital renminbi has been increased.

A few days ago, Beijing launched a new round of digital renminbi pilot work, focusing on traffic travel scenarios that are closely related to users. In addition, Hong Kong, China is gradually testing the cross-border use of digital renminbi, and recently released a digital Hong Kong dollar technical white paper to explore the feasibility of issuing retail-level central bank digital currencies in Hong Kong.

Beijing focuses on transportation and travel for  1 cent by bus and subway

Starting from October 12th, Beijing officially launched a digital RMB pilot activity with the theme of “Beijing Color Digital Carnival for People’s Livelihood”. Specifically, the Industrial and Commercial Bank of China and Beijing Ruyixing Technology Co., Ltd. launched the “Beijing Caitongxing-Yitongxing 1 cent to take the subway” preferential activity, and the Agricultural Bank of China and Beijing Yitong reached a cooperation agreement. After opening a digital renminbi wallet in Beijing, consumers can use coupons to enjoy payment discounts, with a minimum of 1 cent for a ride.

It is worth mentioning that the Agricultural Bank of China and the Beijing All-in-One Card have launched a special digital renminbi “hard wallet” in response to the payment difficulties of foreign tourists, young and old, and other specific groups. There is no need to rely on the network environment for consumption, as long as it is close to the terminal. “To complete the payment. At present, the “hard wallet” is still in the testing stage, and applications are not yet open to the public.

“The Beijing Digital RMB pilot activity demonstrates that it has fully adopted market-oriented means in its promotion methods.” Analysys Senior Analyst Su Xiaorui said, combining consumption hotspots and specific characteristic scenarios, through innovative and people-friendly methods The recognition of users can not only play the role of digital renminbi in the retail market, but also help expand the influence of digital renminbi in the domestic payment industry.

In fact, Beijing has already begun to conduct digital RMB pilot projects in traffic travel scenarios. At the end of June, Beijing Rail Transit launched the ride experience test of the digital renminbi payment channel of the whole road network. At the beginning of August, Beijing Rail Transit added support for offline ticket/card purchases/cards, fare replenishment and recharge functions of digital renminbi, as well as applications in scenarios such as online ticket purchase on the Yitongxing APP, realizing digital renminbi in rail transit gates and ticket payment scenarios Full coverage.

Judging from the pilot promotion of digital renminbi nationwide, the traffic travel scene is favored by users. At present, the digital renminbi APP sub-wallet has been docked with the payment and recharging services of many metro apps including Beijing Rail Transit, Changsha Metro, Qingdao Metro, Chengdu Metro and so on.

For example, Chengdu’s use of “Tianfutong APP” to pay for digital RMB for public transportation and subway travel has completed system construction and preliminary testing, and some whitelisted users have already experienced the ride; Suzhou Rail Transit Line 5 (Yangcheng Lake South-Taihu Lake) Xiangshan) All station automatic ticket vending machines support digital RMB scanning code to pay for ticket purchases.

“Preferential activities are carried out through public transportation, with large discounts and low costs. At the same time, due to the many application scenarios and wide coverage, the coverage of residents’ participation is gradually increasing.” Wang Peng, an associate professor at Renmin University of China, said through the “small step run.” To achieve traction, we will continue to promote the digital RMB pilot work in terms of cultivating user habits, testing internal stability, and developing more adaptable software and hardware devices.

Hong Kong, China takes the first step in exploring the digital Hong Kong dollar 

Recently, the Hong Kong Monetary Authority of China (hereinafter referred to as the “Hong Kong Monetary Authority”) released a digital Hong Kong dollar (e-HKD) technical white paper. Based on the currency model, explore potential technical solutions.

According to the white paper, the proposed technical architecture follows the three key principles of security efficiency, open innovation, and competition, and mainly solves problems such as excessive issuance, privacy protection, and transaction traceability. Since different technical architectures involve different pros and cons, a more thorough investigation is needed through experiments in the follow-up.

The release of the white paper marks the first step taken by the Hong Kong Monetary Authority in the technological exploration of the digital Hong Kong dollar. Yu Weiwen, President of the Hong Kong Monetary Authority, said, “The knowledge gained from this research, together with the experience gained from other central bank digital currency research projects, will help us to further think and explore the technical design of the digital currency.”

It is worth noting that Hong Kong, China has been actively involved in the construction of the central bank’s digital currency very early. In January 2020, the Hong Kong Monetary Authority and the Central Bank of Thailand announced the results of the central bank’s digital currency joint research plan-the “Inthanon-LionRock Project” and published a research report.

In February of this year, the Hong Kong Monetary Authority, the Central Bank of Thailand, the Central Bank of the United Arab Emirates, and the People’s Bank of China Digital Currency Research Institute announced the joint launch of a multilateral central bank digital currency bridge research project; in June, the Hong Kong Monetary Authority announced the fintech 2025 strategy. Mentioned to deepen the central bank’s digital currency research and to strengthen preparations for Hong Kong, China in issuing central bank digital currencies at the wholesale and retail levels, an inter-departmental working group has been established within the Hong Kong Monetary Authority to study digital dollar projects.

Zheng Lei, chief economist of Baoxin Finance, said in an interview with a reporter from Securities Daily that it is more strategically valuable to actively promote the use of digital renminbi in Hong Kong than the introduction of the digital Hong Kong dollar. Of course, Hong Kong will have greater flexibility in launching the digital Hong Kong dollar, and more digital financial innovations can be carried out on this basis.

In addition, the Hong Kong Monetary Authority has been cooperating with the People’s Bank of China to conduct technical tests on digital renminbi in Hong Kong, China, and provide convenient cross-border payment services for Hong Kong and mainland residents.

Wang Peng believes that if a cross-border digital renminbi payment network is tested and established in Hong Kong, China, it will firstly promote the internationalization of the renminbi; For Hong Kong, the flow of capital, technology, and talent will be concentrated in the field of digital currency, which is conducive to the development and transformation of Hong Kong’s future industries.

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