Digital Yuan Allows Tourists to Use Foreign Accounts for Payments
The Chinese digital yuan, also known as the central bank digital currency (CBDC), has introduced a new feature that allows tourists visiting mainland China to create and top up a digital yuan wallet using their foreign accounts. Developed by the Digital Currency Research Institute of the People’s Bank of China (PBOC), this system is now connected with the Faster Payments System (FPS) of the Hong Kong Monetary Authority, enabling seamless transactions.
By integrating with the Hong Kong banking system, this interconnecting feature offers several benefits for tourists. They can make payments using the digital yuan without relying on alternative payment methods and can conveniently top up their wallets in advance. The Chinese state outlet, People’s Daily, praised this development for its improved control, shorter transaction links, and lower costs.
Pilot Test at the 19th Asian Games
The PBOC introduced this new feature during the 19th Asian Games held in Hangzhou, Zhejiang from September 23 to October 8. Athletes from various delegations used the digital yuan system under the guidance of assistants at the Asian Games Village where they were staying. They downloaded the digital yuan wallet, opened an account, and tested different payment and top-up methods.
Athletes provided positive feedback about the simplicity and convenience of using the digital yuan wallet for purchases in the Athletes Village. This successful trial demonstrates the government’s efforts to promote wider adoption of the digital yuan in various payment scenarios across China.
In September, the PBOC implemented a QR-based interoperable standard that supports multiple payment systems, including the digital yuan. Following a limited pilot in July, Jinan implemented digital yuan payments for transportation fares.
Hot Take: Digital Yuan Expands Interoperability to Boost Adoption
The integration of the digital yuan with the Hong Kong payment system is a significant step towards enhancing the adoption and convenience of China’s central bank digital currency. By allowing tourists to use their foreign accounts for digital yuan transactions, the Chinese government aims to attract more visitors and promote the use of the digital currency in everyday payments.
With shorter transaction links and lower costs, the digital yuan offers a more efficient and cost-effective alternative to traditional payment methods. As pilot tests, such as the one conducted at the 19th Asian Games, receive positive feedback, it paves the way for further expansion and integration of the digital yuan in various sectors across China.
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