Standard Chartered, PwC make case for programmable CBDC in China Greater Bay Area

British multinational bank Standard Chartered and PwC China have teamed up to produce a white paper on applications for central bank digital currencies (CBDCs) in China’s so-called Greater Bay Area – Guangdong Province, Hong Kong and Macao. the ability to program will make all the difference, they concluded,

The Greater Bay Area (GBA) presented an interesting test case due to the multiple currencies used in the multiple jurisdictions. Macau uses the pataca, while Hong Kong uses the Hong Kong dollar and the Chinese yuan. According to the report, in 2021 cross-border trade in the region is expected to be around 3.8 trillion yuan (US$535 billion).

Programmable CBDCs are being tested in Hong Kong. It offers a range of benefits, the report states:

“The successful launch of programmable use cases in the GBA could provide a foundational framework for how other CBDCs can interact in cross-border commercial scenarios.”

“Widespread business adoption depends on the collective efforts of industry participants to better serve their customers,” the report said. CBDC smart contracts can be launched in the implementation of cross-border trade, increase currency flexibility in the supply chain for invoice settlement, and streamline service and loyalty programs by retailers using a single multicurrency wallet.

Related: Hong Kong Completes Retail CBDC Project With CBDC-Backed Stablecoin

The report examines CBDC-based loyalty programs in detail. More user-friendly loyalty programs would benefit smaller retailers whose programs are less likely to enroll consumers. The report states that payment service providers can leverage smart contracts for Know Your Customer (KYC) processes.

#shenzhen And #Guangzhou third and fourth after Beijing and Shanghai, while all 11 cities #Guangdong– Hong Kong-Macao Greater Bay Area Makes 2022 Chinese Cities of Opportunity Report Released by World’s Leading Consultancy @pwc, #GDupdates #gbafocus (/I C) pic.twitter.com/6KF1fkOUcH

– Info Guangdong (@iGuangdong) September 6, 2022

The Hong Kong Monetary Authority recently launched an e-HKD CBDC pilot project that looks at a range of use cases including tokenization.

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