Ba Shusong: The digital yuan is a favorable supplement to the "wealth management connect" in the Guangdong-Hong Kong-Macao Greater Bay Area

On the evening of January 18, HKEX Managing Director and Chief China Economist Bashusong participated in the discussion at the 14th Asian International Financial Forum, mentioning that 80% of the world's central banks have participated in the research and development of CBDCs (central bank digital currencies), of which 10% have carried out relevant pilots.

It is reported that the central bank's digital currency currently includes two models of retail and wholesale, of which the retail model is mainly used for personal daily consumption, and the wholesale model is mainly used in large-scale and low-frequency financial transactions.

Ba Shusong pointed out that the mainland's research and promotion of CBDC has great reference experience for Hong Kong. The comprehensive development of the mainland in terms of finance and industry is closely related to the development of Guangdong, Hong Kong and Macao in the Greater Bay Area. Hong Kong is the most important offshore RMB center and a window for the opening up of the financial market to the outside world, with a large amount of RMB circulation. If the electronic onshore RMB can be piloted in the Greater Bay Area, it can promote the internationalization of the RMB and strengthen its circulation, which will promote prosperous transactions between Hong Kong, the Mainland and the Belt and Road countries.

In addition, due to the traceability of the digital yuan, it can solve problems that could not be solved under the traditional framework before, which Ba Shusong believes is a favorable supplement to the Guangdong-Hong Kong-Macao "Wealth Management Connect" project in the Greater Bay Area.

Bénédicte Nolens, head of the Hong Kong Center of the International Settlement Bank's Innovation Hub, also mentioned that Hong Kong is the first region to start developing CBDCs, which has natural advantages in the wholesale model of cross-border payment. However, while the scope of CBDC application is expanded to various countries, it also faces challenges in scientific and technological research and development, overall planning, and legal supervision.

According to the Deputy Secretary for Financial Services and the Treasury of the Government of the Hong Kong Special Administrative Region, Mr Chan Ho-lien, the Hong Kong Monetary Authority has conducted a joint research programme on digital currencies with the Bank of Thailand, which has established a trading bridge between Thailand and Hong Kong, which can enable banks in the two places to conduct foreign exchange transactions in a peer-to-peer manner.

As a financial center, Hong Kong currently has many blockchains, digital assets professional support, and strengthened the supervision of cryptocurrencies. Henri Arslanian, global head of crypto technology at PricewaterhouseCoopers, believes that in the future, Hong Kong financial institutions will further intervene in the field of crypto asset management, and digital assets will increasingly align with mainstream assets.

This article originated from Blue Whale Finance