August 12, 2020
The $2T Economy of Hong Kong’s Greater Bay Area has already been a showing ground for blockchain technology.
The work on China’s Digital RMB, or DCEP, continues with testing in Shenzhen. By the time it launches, the Greater Bay Area, a region including Guangdong, Hong Kong, and Macau, would be the first place where the technology is openly shown. With its opposing legal systems, the Greater Bay Area has been a focal point in removing obstacles to trade with blockchain.
Fresh off the statement that the retail DCEP app is undergoing the final periods of beta testing in Shenzhen, a representative from the People’s Bank of China told resident media in the country that the first area where the platform would be formally positioned is the Greater Bay Area.
The Greater Bay Area is a regional arrangement of Hong Kong, Macau, and Shenzhen, with a combined GDP of $2 trillion that Beijing wants to fit into a unified economic hub. Its rival legal systems, however, make that a contest. The lack of guidelines for customs and finance regulations has made the region a showing ground for blockchain and digital ledger technology. In June, China Guangfa Bank launched a blockchain-based system for unified cross-border payment settlements.
Bai Hexiang, the President of People’s Bank of China’s Guangzhou Branch, said that financial organizations and companies in the region that transact with high volumes of cross-border trade would be first on the list of companies piloting the platform.
“Considering the large-scale cross-border adoption of DCEP in the future, Guangdong might be one of the most important markets,” said Xiao Lei, a financial analyst to Southern Daily, “Guangdong has a well-developed business environment, large population and wide range of international trade, all which will help push with the adoption of DCEP.”
When Beijing has recognized blockchain as a planned technology, the PBoC and the China Banking Regulatory Commission have issued a blockchain-based “master plan” for the district — a column of which is the adoption of blockchain technology to facilitate trade.
Beijing chooses Hong Kong’s Greater Bay Area as the first market to position DCEP. In prior announcements, the PBoC said that DCEP would be presented in time for the 2022 Olympic Games tentatively planned to be held in Beijing. Thus far, an official time table for the launch has yet to be proclaimed.