Ahead of the Asian Games, China has introduced two new functionalities to its central bank digital currency (CBDC). The updates allow Hong Kong visitors to top up their digital yuan wallets using Hong Kong’s Faster Payment System, and Visa or Mastercard accounts.
Hong Kong has been working on integrating the digital RMB for three years, but this update will enable cross border payments and allow Hong Kong residents visiting mainland China to top up their Digital RMB wallets using Hong Kong’s Faster Payment System, state newspaper The People reported. The update will give users more control of their accounts, with faster transaction links and lower transaction costs.
The system is built and operated by the Digital Currency Research Institute of the People’s Bank of China. And the “FPS” fast payment system (FPS) is led by the Hong Kong Monetary Authority (HKMA). Tests are also underway for mainland residents using digital RMB wallets in Hong Kong.
The second feature introduces a ‘recharge first, use later’ functionality. China uses its own card system, UnionPay, so Visa and Mastercard are not as ubiquitous as in the West. It was already possible for foreigners to use cards for the digital RMB. However, the charge was made at the point of payment, which can be slow.
The latest updates allow Visa and Mastercard holders to top up their digital RMB wallets with a lump sum in advance, enabling faster payments during visits to the mainland. Users can also enable an automatic recharge function, which will top up the digital wallet from their bank account when users have insufficient funds for a transaction.
This is not the first time China has used an international sporting event to showcase the development of its CBDC. It promoted the digital currency during the 2022 Beijing Winter Olympics.
