China's digital currency

Will China be the first to issue a sovereign digital currency?

China was the first major economy to begin exploring its own digital currency in 2014, though it is yet to launch the proposed digital yuan. Unlike cryptocurrencies such as bitcoin, which are not centrally controlled, China’s “sovereign” digital coin would fall under the authority of the People’s Bank of China. China maintains a blanket ban on the trading of any cryptocurrencies, as the government regards them as a source of financial risk.

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Banking & Finance
A Chinese national flag flutters outside the China Securities Regulatory Commission building in Beijing on July 9, 2021. Photo: Reuters
Banking & Finance
Official of China’s securities watchdog investigated for ‘serious violation’
Investigation into Yao Qian, who serves as the director of the department of technology supervision at the China Securities Regulatory Commission, comes amid an uptick in market reforms.
Banking & Finance
HSBC summit: Hong Kong best placed to drive digital assets market, bank says
Hong Kong has entered the next phase of its digital-assets development, which is to achieve benchmark liquidity in the primary and secondary markets, according to HSBC’s global head of digital assets strategy.
Tech
Qingdao metro facilitates e-CNY payment even when balance is insufficient
Qingdao in Shandong province has launched a new ‘deferred payment’ feature for metro passengers wanting to use digital fiat money: they can exit the station even if the wallet balance is not enough.
Banking & Finance
Explainer|What is wCBDC and why is it important for Hong Kong?
The HKMA’s new wholesale central bank digital currency project aims to enhance interbank settlements for tokenised money. A planned sandbox will test settlement of tokenised real-world assets.
Editorial|HKMA steals march with its new wholesale central bank digital currency
De facto central bank aims for first-mover advantage through blockchain technology, providing welcome lift to Hong Kong’s image as global financial centre
SCMP Editorial
China
China to bring down payment barriers for foreigners to revive tourism
Mobile payments limits will be increased and tourist attractions encouraged to accept cash and bank cards, central bank says.
7
Policy
Shanghai digital currency tax explainer fans speculation on easing of China’s crypto ban
The Shanghai Municipal Tax Service’s explainer became widely circulated on Sunday after some local crypto enthusiasts suggested that authorities are starting to acknowledge the legitimacy of cryptocurrencies.
Policy
Bank of China completes cross-border settlement for metals trading using e-CNY
China has been expanding the use of its sovereign digital currency in cross-border businesses, with the Bank of China completing the first cross-border settlement for precious metals trading.
Policy
China, Singapore to let each other’s tourists pay with digital yuan
The use of digital yuan for small transactions can pave the way for its application in trade and other high-value scenarios, one expert says.
6
China Economy
Greater Bay Area: think tank’s common market plan cites EU as instructive
A think tank has recommended the establishment of a common market in China’s Greater Bay Area, proposing a system of regional integration similar to the European Union.
2
Banking & Finance
E-CNY: HSBC, Standard Chartered jump on China’s digital currency bandwagon
The China branches of Hang Seng Bank and Fubon Bank are also in the first batch of overseas banks to join more than 40 state-owned banks in launching their services on the e-CNY app.
Comment
Opinion|How China’s digital yuan could work in a dual-currency socialist system
China could split the e-CNY into onshore and offshore versions, have a freely tradeable yuan-pegged stablecoin or even participate in a universal CBDC.
2
Macroscope|Digital currencies: why the US could be the biggest loser
As more central banks explore or push to launch digital currencies, the world is looking likely to fragment into currency blocs. This would reinforce the growing use of local currencies in cross-border payments and hasten a long-term decline in reliance on the US dollar.
Anthony Rowley
2
Banking & Finance
China’s control of daily yuan reference level at degree last seen in 2010
China is keeps the daily reference rate for its currency within a tight range, with a gauge measuring yuan volatility collapsing to levels last seen in 2010.
1
Policy
Hong Kong FinTech Week refocuses city’s Web3 push on tokenisation and CBDCs
Hong Kong officials tout new use cases for blockchain technology at city’s FinTech Week as the SFC unveils new rules for retail access to tokenised securities.
2
Banking & Finance
E-HKD pilot points to ‘tremendous impact’ on banking, financial services: HKMA
The e-HKD, Hong Kong’s central bank digital currency, could help to settle payments quicker and be more cost effective for businesses, a pilot trial has shown.
Big Tech
Beijing forum promotes SIM-based ‘e-CNY hard wallet’ for digital payments
Promoters say the ‘e-CNY hard wallet’ has several advantages as a payment mechanism, including safety, reliability and convenience.
China Economy
Explainer|How is China’s digital yuan roll-out progressing in 2023?
China’s central bank is ramping up the promotion of its digital currency, making it easier and more convenient for everyday users as well as cross-border transactions. Here’s what has been accomplished this year.
1
Business
Hong Kong e-HKD trials explore use in payments, investments: HKMA boss
Trials of the digital currency have showed potential uses in payment, deposit and investment scenarios, but relevant players need more experience before a launch date can be considered, says the head of the city’s de facto central bank.
2
Comment
Opinion|A single currency is not the best way for Brics to de-dollarise
Despite hopeful talk of a Brics currency, the time is not yet ripe for such a move. It is more feasible for each state to launch a central bank digital currency and work towards interoperability.
10
Big Tech
CEO of fintech giant Ant Group pledges support for digital yuan
Eric Jing Xiandong said the e-CNY could be as valuable to industrial internet use as mobile payments were for consumer use.
Policy
Alipay, WeChat Pay urged to unify QR codes by China’s digital yuan chief
Call for unification of QR codes comes as the People’s Bank of China pushes to promote the country’s central bank digital currency across all retail use cases.
1
Travel & Leisure
Best apps for visitors in China and which are useless – like Google Maps
Foreigners visiting China are advised to download WeChat and Alipay for payments, Amap for maps, Baidu Translate for communication, Trip for hotel bookings – and don’t forget that VPN.
6
China Economy
China’s digital yuan ‘at forefront globally’, ex-central bank governor says
Former central bank governor Yi Gang gave two recent lectures of his tenure in Beijing and Singapore, saying China’s digital yuan could facilitate a wide range of domestic retail payments, including by foreign visitors, while it also has overseas use.
2
Comment
Opinion|How Hong Kong can become the Asian century’s financial linchpin
To fulfil its destiny as the top Asian financial clearing house, Hong Kong must broaden its horizons and have a truly regional vision.
Tech Trends
Mainland tourists can spend digital yuan in Hong Kong courtesy of Bank of China
Bank of China Hong Kong kicked off a new e-CNY trial with 200 merchants on Tuesday, its third in the city to test cross-border payments of China’s sovereign digital currency.
Tech Trends
Circle CEO says yuan-backed stablecoins could help yuan internationalisation
Circle co-founder and CEO Jeremy Allaire acknowledged that China is not likely to open up to cryptocurrencies, but said stablecoins could help Beijing in its goal of yuan internationalisation.
Comment
Opinion|Why central bank digital currencies are the innovation to watch
Central banks across the world are responding to the challenge posed by the rise of decentralised finance by creating their own digital currencies to retain control while providing a trusted, transparent, efficient and resilient financial system that avoids scams and enables official oversight.
2
Policy
China’s digital yuan office was too generous in pay rises, audit finds
The Digital Currency Research Institute gave employees an average pay bump of 28 per cent in 2020, eight times the typical ceiling for government departments, and has since gone on a hiring spree.
Opinion|In technological race for convenience, we must not leave privacy in the dust
China and other countries are quickly adopting biometric payment methods, digital currency and IoT tech for everyday needs, but many worry progress comes at a cost.
Josephine Ma
2
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