The Bank of China digital RMB wallet has cross-border payment options, and it is testing cross-border payment functions with Hong Kong, Singapore and other regions.
Original title: “BOC Digital RMB Wallet Reveals Cross-border Payment Information, Hong Kong LionRock Project Welcomes New Progress”
Written by: Little D
The rapid development of digital renminbi has made the industry happy, but some industry professionals are more optimistic about the potential of digital renminbi in the field of cross-border payments.
Digital RMB and Hong Kong’s cross-border payment are beginning to take shape
Recently, netizens found in the digital renminbi wallet opened by Bank of China Mobile Banking that they can see the choices of common countries or regions of “Mainland China,” “Hong Kong,” and “Singapore” by transferring currency through their mobile phone number or mailbox.
This also indirectly reveals that the digital renminbi is actively testing the possibility of cross-border payments with Hong Kong, Singapore and other regions, and certain progress has been made.
Previously, Hong Kong Monetary Authority President Yu Weiwen released “New Trends in Financial Technology-Cross-border Payments”. The article pointed out that the Hong Kong Monetary Authority is working with the Central Bank Digital Currency Research Institute to study the use of digital renminbi for cross-border payment technology tests and make corresponding technologies ready.
Yu Weiwen pointed out in the article that the use of Renminbi in Hong Kong is actually very common. The positioning of digital Renminbi as cash in circulation will bring greater convenience to tourists in Hong Kong and the Mainland. “Although there is no timetable for the launch of the digital renminbi, it is believed that it will provide residents of the two places who need to make cross-border retail purchases with an additional payment method in the future.”
In response, a spokesperson for the Hong Kong Monetary Authority stated that BOCHK was designated by the Central Bank to participate in the technical test as a digital RMB bank representative in Hong Kong. Merchants and approximately 200 bank employees were invited to participate in the test. Bank of China, the parent company of BOC Hong Kong, is one of the institutions participating in digital RMB research and development and internal testing in the Mainland.
Hong Kong LionRock project enters the second phase
On January 11, the Hong Kong Financial Development Council issued a report stating that about four-fifths of the world’s central banks have carried out research and development on central bank digital currencies, and related developments will have a significant impact on the way they provide financial services in the future.
In Hong Kong, the central bank’s digital currency research work began in 2017. The Hong Kong dollar note-issuing banks led by the Hong Kong Monetary Authority (HKMA) launched the LionRock project, which has now entered the second phase. Currently, the Hong Kong Exchanges and Clearing Co., Ltd., 19 banks and five other companies will participate in the project, and will operate on a trial basis with actual trade transactions. The research results are expected to be published in the first quarter of 2021.
It is worth noting that the content of the proof-of-concept research carried out by the project includes the issuance of token central bank digital currency and debt securities under a single distributed ledger technology system. Through in-depth analysis, the LionRock project demonstrated the feasibility of using distributed ledger technology to issue central bank digital currencies and to conduct atomic transactions using dual payment (DvP) settlement. Compared with traditional bank payment systems, central bank digital currencies can reduce the settlement process. The potential of the number of intermediaries and architectural layers involved in
In this context, the HKMA decided to expand the scope of research to include cross-border fund transfer and foreign exchange settlement, and then cooperated with the Central Bank of Thailand, which had conducted similar research through the Inthanon project.
The joint plan of the Central Bank of Thailand and the Monetary Authority was named the Inthanon-LionRock project. The first phase of the project started in September 2019 and was completed in December 2019. The project aims to create a proof-of-concept model, which includes a Thai Baht-Hong Kong dollar regional corridor network to connect the LionRock and Inthanon networks (local payment networks in Hong Kong and Thailand each operated by distributed ledger technology). The corridor network is built on R3’s Corda blockchain platform, allowing participants in Inthanon and LionRock networks to transfer funds and execute foreign exchange transactions in a peer-to-peer manner, thereby reducing the number of settlement architecture layers. The corridor network also aims to assist banks in managing foreign exchange liquidity, adopting a multi-currency liquidity deposit mechanism, and introducing local regulatory compliance systems where applicable. Other major research results of the concept certification project are set out in the report published by the authorities of Hong Kong and Thailand in January 2020, including token exchange, real-time interbank fund transfer, foreign exchange execution, liquidity management and supervision Compliance and other categories. The report also sets out future legal, operational and technical considerations for the reference of major central banks. The authorities of Hong Kong and Thailand have expressed that they will continue to carry out further cooperative research in related fields, including exploring substantive business cases and connecting corridor networks to other platforms, and will conduct a trial operation on cross-regional fund transfer, which involves multiple banks and other parties participate.
The Project Inthanon-LionRock project has now entered the second phase, which aims to explore commercial application cases in cross-border trade settlement and capital market transactions, and plans to improve the prototype of the cross-border corridor network to support other central bank digital currencies in the region.
According to a survey conducted by the Bank for International Settlements (BIS), of the 66 central banks that responded to the survey, about 80% of central banks are participating in central bank digital currency research and development, and half of them are conducting both wholesale and general (or retail) central banks. Research and development of digital currency.
At present, the digital renminbi has made good progress, and its future expansion into the field of cross-border payment is also an indispensable operation, and how it will be linked with Hong Kong’s central bank digital currency project in the future, we can only wait and see.
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