The China Central Bank to team up with the Hong Kong Monetary Authority on Digital Yuan

The People’s Bank of China’s Governor, Yi Gang, stated that the bank would collaborate with the Hong Kong Monetary Authority on the digital yuan. He also emphasizes the importance of privacy in design and development.

The People’s Bank of China is collaborating with the monetary authority of Hong Kong to launch the digital yuan.

The central bank’s Governor, Yi Gang, announced the initiative during a speech at the Hong Kong FinTech Week 2022. Several Chinese provinces are now using the central bank’s digital currency (CBDC).

Yi stated that CBDCs have gained popularity in recent years and that the technology has the potential to benefit economies. According to the governor, the central bank is collaborating with the HKMA and other monetary authorities.

The goal is to “better serve both global and domestic investors while also contributing to the enhancement of Hong Kong’s role as an international financial center.”

He also stated that China would work to strengthen its ties with international organizations. Yi emphasized that international cooperation would be required for the technology’s smooth implementation.

Furthermore, Yi acknowledged that there were difficulties, stating that one of the most pressing concerns was privacy. China has previously promised to keep this promise. For this purpose, he explains a two-tiered system as follows:

At tier one, the PBOC only provides e-CNY to authorized operators and processes inter-institutional transaction data. Tier two authorized operators “only collect personal information necessary for their public exchange and circulation services.”