While Hong Kong is part of China, it is a special administrative region, meaning it has a border and a separate central bank. Which makes it an excellent cross-border test partner for the digital currency China is testing.
China launches second lottery to test digital yuan
China’s central bank will repeat its $1.5 million “red envelope” central bank digital currency program in Suzhou, following the successful run in Shenzhen
The Shenzhen test acted as both a stress test and a marketing initiative. The City government gave away $1.5 million to 50,000 randomly selected citizens, who each received 200 yuan—about $30—usable at any of the 4,000 merchants who accept the digital yuan. The Suzhou test will include important new features that did not factor into the Shenzhen trials, most notably the ability to pay while offline.
China calls digital yuan tests a great success
However the launch of the central bank digital currency will not be soon, as a legal framework still needs to be created
Speaking at the Hong Kong Fintech Week conference on Nov. 2, Yi Gang, a governor of the people’s Bank of China, said nearly $300 million of digital yuan has been spent in various pilot programs.
Fed’s Powell warming to U.S. digital currency
Federal Reserve chairman Jerome Powell views are evolving from seeing no value in central bank digital currencies to saying it is important to get it right
“I actually do think this is one of those issues where it's more important for the United States to get it right than it is to be first, given the dollar's important role globally,” Powell said during an International Monetary Fund (IMF) panel on Oct. 19. “Getting it right means that we not only look at the potential benefits of a CBDC, but also the potential risks and also recognize the important trade-offs.”