200+ Hong Kong stores now accept digital yuan, as China’s CBDC expands across borders.

200+ Hong Kong stores now accept digital yuan, as China's CBDC expands across borders.

The Growing Acceptance of Digital Yuan in Hong Kong Stores

Source: LT/Adobe

Over 200 stores in Hong Kong have recently started accepting digital yuan payments, marking a significant step in China’s efforts to expand the use of its Central Bank Digital Currency (CBDC) beyond its borders. This move aims to leverage the popularity of digital payments and cater primarily to Mainland Chinese tourists visiting Hong Kong.

The list of vendors accepting the e-CNY includes a diverse range of businesses, such as liquor vendors, hotels, convenience stores, children’s clothing stores, jewellery outlets, supermarkets, electronics retailers, pharmacists, and beauty stores. To incentivize the use of digital yuan, Mainland Chinese shoppers can also enjoy discounts of up to approximately $14 when spending their digital holdings in selected Hong Kong outlets. This promotion will run until the end of August.

Chinese banks have been actively seeking to provide more cross-border spending options for their customers. Initially, the focus has been on Hong Kong and Macau, both being Chinese regions with separate economic systems and currencies. By using these regions as testbeds, Beijing can evaluate the effectiveness of the e-CNY in a cross-border context.

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This initiative has received positive responses from other countries popular with Chinese tourists, such as South Korea. Discussions have already taken place regarding the acceptance of digital yuan payments in South Korean tourist hotspots like the Myeongdong District of Seoul.

The Bank of China, one of Mainland China’s largest state-run commercial banks, is operating the discount offer in collaboration with its Hong Kong branch. To avail the discounts, Mainland Chinese consumers need to scan QR codes from their digital yuan wallets at participating stores. However, citizens of Jiangsu, Guangdong, and Shenzhen can receive their coupons prior to leaving for Hong Kong through Bank of China apps or local bank branches. The coupons are valid for 15 days after redemption.

A Hong Kong shopping mall. (Source: Mk2010[CC BY-SA 4.0])

Hong Kong as a Key Focus for the Chinese CBDC

The Bank of China Hong Kong has expressed its commitment to enhancing its “digital yuan acquisition capabilities.” It stated that some Hong Kong merchants are actively improving their collection systems to provide e-CNY payment services for cross-border visitors. The bank highlighted that the period from July to August is the traditional peak tourist season in Hong Kong’s shopping districts, and it expects its cross-border shopping festival to significantly boost footfall in stores and overall consumption.

While digital yuan wallets cannot be officially opened in Hong Kong yet, which is not part of the pilot zone, shoppers are advised to open a digital yuan wallet in the existing pilot area before traveling. However, for merchants in Hong Kong, accepting CBDC payments is as simple as downloading a software upgrade for their existing point-of-sale (POS) payment systems.

The Bank of China’s Hong Kong branch offers merchants two settlement methods if they accept digital yuan payments. They can either choose to convert the payment to Hong Kong dollars or swap it for conventional yuan. Currently, the pilot zone includes major cities such as Beijing, Shanghai, Dalian, Tianjin, Hangzhou, Ningbo, Wenzhou, Huzhou, Shaoxing, Jinhua, Fuzhou, Xiamen, Jinan, Qingdao, Changsha, Guangzhou, Nanning, Fangchenggang, Hainan, Chongqing, Chengdu, Kunming, Xishuangbanna, and Xi’an.

The local government of Shenzhen, a city located 27km away from Hong Kong, recently announced that approximately 36 million CBDC wallets have been opened within its city limits, illustrating the growing popularity and adoption of the digital yuan.

In conclusion, the acceptance of digital yuan payments by over 200 stores in Hong Kong represents a significant milestone for China’s CBDC expansion plans. By targeting Mainland Chinese tourists and utilizing the existing popularity of digital payments, China aims to create a seamless cross-border spending experience. The success of this initiative in Hong Kong and Macau will likely pave the way for wider adoption of the digital yuan in other popular tourist destinations. With ongoing developments and increasing acceptance, the digital yuan is poised to reshape the future of global transactions and further establish China’s position as a leader in blockchain technology.

Note: The content in this article is based on the information provided in the original source.