China CBDC progress ‘on track’ with finale ‘not very far away’, says PBOC’s former governor
- ‘Ninety per cent of retail payments in China are already digitalised’ said Zhou Xiaochuan, former head of PBOC on the opening day of HKMA-BIS conference
- Zhou said that after China establishes a CBDC, features like cross border payments as well as applications of tokenisation like smart contracts could be evolved
Progress in central bank digital currencies (CBDC) in China is “already on track” and the “final stage is not very far away”, according to the former head of the People’s Bank of China (PBOC) who was speaking at a conference in Hong Kong on Monday.
“Ninety per cent of retail payments in China are already digitalised,” said Zhou Xiaochuan, who retired in 2018 after 16 years as the longest-serving governor of the PBOC. “There is only 10 per cent left to do.”
The Hong Kong Monetary Authority (HKMA) and Bank for International Settlements (BIS) kicked off their two-day conference on Monday, with a welcome dinner at the JW Marriott Hotel.
The “HKMA-BIS High-Level Conference”, which commemorates the 30th anniversary of the HKMA and the 25th anniversary of the BIS representative office for Asia-Pacific, hosted more than 20 incumbent central bank governors and deputy governors, as well as eight former governors.
Zhou said that after China establishes a CBDC, there are other features the government can evolve, such as cross border payments and applications of tokenisation like smart contracts.
“Cross border payments are a big business opportunity for many central bankers to consider and to explore,” said Zhou. The mobility and convertibility of digital currencies, data protection and privacy concerns are some of the challenges for the PBOC and other banking bodies to study.
The HKMA and BIS joint conference is the first large-scale gathering of central bank governors in Hong Kong since the pandemic. The conference continues on Tuesday when Pan Gongsheng, the current Governor of PBOC, will also deliver a keynote speech.
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The governors and managing directors of financial institutions from several nations including Australia, Spain, England and Thailand will discuss topics of inflation, financial stability and labour markets.
It comes as the global economy grapples with interest rates that are going to be higher for longer, amid rising inflationary pressures, which have overshadowed global capital markets.
Chief executive Filippo Gori from JP Morgan Asia-Pacific, Amy Lo, chief executive of UBS Hong Kong, Surendra Rosha, co-chief executive Asia Pacific of HSBC and Eric Jing, the chairman and CEO of Ant Group, will speak on a panel about the opportunities for Asia in the long term.
Ant Group is the fintech affiliate of Alibaba Group Holding, which also owns the Post.
The purpose of BIS is to foster cooperation and communication among central banks globally and the HKMA has been a member of the BIS since 1996.
“Our participation in these international bodies is crucial to the HKMA’s effectiveness as a financial supervisor and to Hong Kong’s success as an international financial centre,” said Eddie Yue Wai-man, the chief executive of the HKMA, in a press release last Thursday.
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“Through such groupings and their meetings, we share valuable insights and experiences with other central banks on important policy matters that could affect our market.”
The conference comes off the back of the HKMA’s three-day Global Financial Leaders’ Investment Summit, which was attended by nearly 300 top global banking and finance executives and scores of central bankers.
Many of the 90 C-level executives that attended the conference said Hong Kong’s vibrancy and energy was back. That conference was held after Covid-19 related travel restrictions were lifted.
