South China Morning Post: China Accelerates Digital Currency Trials

While pilot tests have been focused on consumers in large cities, the People’s Bank of China is broadening integration to business-to-business (B2B) transactions. The central bank is laying the groundwork for its use overseas, even though China’s stringent capital controls are a major obstacle to greater use of the yuan. China is part of a research initiative with Hong Kong, Thailand and the United Arab Emirates to study the feasibility of using CBDCs for cross-border payments.

Assuming the digital yuan can be used in Hong Kong for trade settlement, merchants could be incentivised to adopt the Chinese currency because of a cheaper and faster clearing system, said Michael Ho, principal at the corporate and institutional banking practice of consultancy Oliver Wyman.

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