Standard Chartered and PwC China explores CBDC implementation in China's GBA.
Standard Chartered, a British multinational banking institution, and PwC China have joined forces to develop a comprehensive white paper exploring the potential of central bank digital currency (CBDC) in China's Greater Bay Area (GBA).
The GBA, which includes Guangdong Province, Hong Kong, and Macao, presents an intriguing case study due to its multiple jurisdictions, each operating with distinct currencies.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
Bullish vs Bearish Markets: How to Predict it? (Animated)
The complexity of the financial landscape, involving the pataca in Macao, the Hong Kong dollar in Hong Kong, and the yuan in China, makes for an ideal testing ground for programmable CBDC. Based on the report, in 2021, the region facilitated a cross-border trade volume amounting to approximately 3.8 trillion yuan ($535 billion).
The white paper highlighted that the successful deployment of programmable CBDC within the GBA could serve as a blueprint for other CBDCs in terms of their functionality in cross-border commercial transactions. The report further stressed that:
Widespread commercial adoption hinges on collective efforts between industry participants to better serve their customers.
Programmable CBDCs offer a handful of implementation opportunities, ranging from cross-border trade to supply chain invoice settlements. Retailers could also use these CBDCs to streamline service and loyalty programs using a single multicurrency wallet.
A closer look at CBDC-based loyalty programs revealed significant potential benefits, particularly for smaller retailers. More user-friendly loyalty programs could encourage consumers to engage with these businesses, which they might otherwise overlook.
The collaborative effort by PwC China and Standard Chartered underscores the viability of programmable CBDC within China's Greater Bay Area. Given the region's robust cross-border trade and unique multi-currency system, the initiative could be a game-changer, shaping the future of digital currencies in other regions and potentially worldwide.
In other news, the central banks of Hong Kong and the United Arab Emirates (UAE) have announced plans to join forces on the development of financial technology and cryptocurrency regulations.
