The central bank digital currency (CBDC) project favored by the Chinese government has so far generated little enthusiasm among Hong Kong residents.
Few requests
During the first 4 days since the digital Yuan (also known as ‘e-CNY’) was made accessible for city residents to place in their digital wallets, only 625 Hong Kongers had actually done so. To put this in contrast: the city has more than 7.4 million inhabitants.
On February 28 reported a local newspaper said that the city of Shenzhen was the first in the country to install machines that dispense hard wallets for the digital Yuan. Due to the city’s unique location as Hong Kong’s gateway to mainland China, the machines were programmed to serve only Hong Kong residents.
The initiative, launched by the Bank of China and smart card provider Octopus Card, aimed to issue 50,000 hard wallets by March 31. However, in the first 4 days after installing the machines, only 625 wallets were requested by customers.
Even the government-subsidized 20% discount on purchases from 1,400 local vendors for CBDC owners doesn’t seem to be a deciding factor for potential users.
Efforts will continue
However, the Securities Times emphasizes that local authorities will continue their efforts to promote the digital yuan to Hong Kong residents, including the project of a hard wallet for SIM cards that combines financial and communication functions. This is part of a broader political mission to integrate the newly independent island city into the Guangdong-Hong Kong-Macao Greater Bay Area.
Despite efforts by the Bank of China, e-CNY adoption in the country is still slow. In October 2022, 2 years after the introduction of the CBDC to the market, the total number of e-CNY transactions was just above 100 billion Yuan ($14/€13 billion). Finally, in February 2023, multiple cities reportedly gave away more than 180 million Yuan ($26.5/€25 million) of CBDC in programs such as grants and food coupons to boost adoption during the Lunar New Year period.
