Bloomberg: Hong Kong To Expand Cross-Border Tests Of Digital Yuan

Hong Kong is in talks with China to expand cross-border testing of the digital yuan after the first phase proceeded smoothly, another step toward wider adoption of the currency. The use of the digital yuan in Hong Kong could lead to a much faster and cheaper cross-border payment and clearing process, consultancy Oliver Wyman said in a report released Wednesday. It estimated that costs related to cross-border payments in the city are about $20 billion to $40 billion per year, the equivalent of as much as 11% of the city’s gross domestic product in 2020. “If the payment infrastructure underpinning e-CNY were to roll out for cross-border payments at scale, we believe it can address a substantial portion of this cost base,” said Michael Ho, Principal of Financial Services at Oliver Wyman and co-author of the report.

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