Faster top-up mode mulled for cross-border payments

Top News | Staff reporter 27 Jan 2022

Hongkongers will be able to use the Faster Payment System to top up their e-yuan wallets when shopping in mainland China, while mainlanders can trade Hong Kong stocks with yuan under the Stock Connect in the future, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu has said.

The top-up option is being discussed between the Hong Kong Monetary Authority and People's Bank of China and the status of e-yuan is the same as physical yuan in circulation, Hui said in a written response to a question in the Legislative Council yesterday.

The digital yuan will offer an additional means of payment that is safe, convenient and innovative for cross-boundary retail consumption, Hui said.

The HKMA is studying a project called Multiple Central Bank Digital Currency Bridge with the central banks of China, Thailand and the United Arab Emirates, as well as the Bank for International Settlements Innovation Hub Hong Kong Centre, and the international real-time trade settlement function is expected to enter the pilot stage this year, Hui said.

Previous testing has shown that the project can enhance the efficiency of cross-border payments while satisfying the relevant policy, regulatory and privacy protection requirements, the secretary said.

The HKMA is also examining the feasibility of issuing retail level central bank digital currency in the city, taking into account both technical and policy-related aspects. An initial view on the digital Hong Kong dollar is expected in the middle of this year, according to Hui.

The study is being conducted based on the existing currency board mechanism, hence will have no impact on Hong Kong's monetary system, Hui added in his reply.

He also said in a forum yesterday that the government will continue to explore with mainland authorities the construction of offshore yuan infrastructure to further promote the internationalization of the yuan, including allowing investors to trade Hong Kong stocks in yuan without having to exchange the currency.

The SAR government will gradually expand the scale and scope of the Cross-boundary Wealth Management Connect Scheme, Hui said.

Hui, together with Under Secretary Joseph Chan Ho-lim, also held a video conference with the state-owned Assets Supervision and Administration Commission of the State Council yesterday to introduce the Hong Kong Government's corporate investment and governance arrangements, according to the bureau's social media post.



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