e-CNY unlocks cross-border payments (Dr. Ye Wenhan)

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go through Hong Kong Economic Times June 6, 2024

This articleauthorDr. Yip Man-honis the chairman of the Asian Marketing Technology Association and writes a column for the Hong Kong Economic Journal“The Words of God“.

The Hong Kong Monetary Authority and the People’s Bank of China have recently achieved further results in their cooperation on the digital RMB (e-CNY) cross-border payment pilot, expanding the scope of the digital RMB pilot in Hong Kong. This new measure will greatly facilitate Hong Kong residents to open and use digital RMB wallets (referred to as digital currency wallets) and add value to their wallets through “FPS”.

Digital RMB is a legal digital currency issued by the People’s Bank of China, and has been piloted in many major cities in the mainland in recent years. (Xinhua News Agency file photo)

Digital RMB is a legal digital currency issued by the People’s Bank of China. It has been piloted in many major cities in the Mainland in recent years. With the expansion of the pilot scope, Hong Kong residents can now easily open a personal digital currency wallet in Hong Kong using only a local mobile phone number. Digital currency wallets can be used for cross-border payments, but are currently limited to consumption purposes and cannot be used for transfers between individuals for the time being. Hong Kong users can add value to their wallets through “FPS” through 17 local retail banks. It is worth noting that the current upper limit of the wallet balance is RMB 10,000, and there is also a limit on the amount of a single payment.

It is of great significance that Hong Kong has become the first cross-border pilot of the digital RMB. This not only symbolizes the convenience of payment interconnection between Hong Kong and the Mainland, but also reflects Hong Kong’s determination to integrate into the overall national development. With the accelerated development of the integration of the Guangdong-Hong Kong-Macao Greater Bay Area and the trend of Hong Kong people going north for consumption, the application of digital RMB will further promote the flow of people and goods between the two places, and help Hong Kong play a greater role in the country’s financial reform and opening up.

Looking ahead, the cross-border application prospects of the digital RMB are broad. On the one hand, it provides a more convenient payment experience for Hong Kong residents and mainland tourists, stimulating the growth of cross-border consumption. On the other hand, the digital RMB also provides enterprises with efficient cross-border payment channels, reduces transaction costs, and improves the efficiency of capital circulation. In the field of financial services, the digital RMB will bring new business opportunities to local financial institutions and help Hong Kong consolidate its position as an international financial center.

HKMA Chief Executive Eddie Yue said that they will continue to work closely with the PBOC to gradually expand the scope of application of the digital RMB, enrich the functions of the digital RMB wallets available to Hong Kong residents, and encourage more retail merchants to accept the digital RMB, further facilitating cross-border retail payments for residents of both places. At the same time, the HKMA will discuss with the PBOC the use of real-name authentication to allow Hong Kong residents to upgrade their digital currency wallets, as well as promote more interconnections in payments to provide users with a more comprehensive payment experience.

The success of the cross-border pilot of the digital RMB marks a new step in the financial cooperation between Hong Kong and the Mainland. I believe that with the joint efforts of both sides, the digital RMB can play a greater role in promoting cross-border payment convenience and inject new vitality into the economic development of Hong Kong and the Mainland.