Hong Kong Pilots World’s First Integration of Payment System with China’s Digital Yuan

Hong Kong Pilots World’s First Integration of Payment System with China’s Digital Yuan

by May 20, 2024

Hong Kong residents can now set up digital yuan (e-CNY) personal wallets using only their Hong Kong mobile phone numbers.

These wallets, which can be topped up via the FPS through 17 retail banks, are designed for cross-border payments but do not support person-to-person transfers.

The e-CNY can be used in various Mainland pilot areas, including the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).

This is a major step forward in the e-CNY pilot programme for cross-border payments by the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC).

The initiative aims to expand the use of e-CNY wallets by Hong Kong residents, allowing them to top up these wallets through the Faster Payment System (FPS).

This marks the world’s first integration of a faster payment system with a central bank digital currency system, providing an innovative use case that underscores interoperability—a key focus of the G20 Roadmap for enhancing cross-border payments.

The expansion of the e-CNY pilot in Hong Kong is part of the PBoC’s “three connection, three facilitation” initiative.

The HKMA will continue collaborating with the PBoC’s Digital Currency Institute (DCI) to upgrade e-CNY wallets through real-name verification and enhance payment interoperability.

This expansion aims to provide a more convenient user experience for individuals and merchants, with future plans to explore corporate use cases for cross-boundary trade settlement.

Eddie Yue

Eddie Yue

Eddie Yue, Chief Executive of the HKMA said,

“We are delighted that Hong Kong, being the first place in conducting cross-boundary e-CNY pilot, has also become the first place outside the Mainland that enables its residents to set up e-CNY wallets locally.

 

By expanding the e-CNY pilot in Hong Kong and leveraging the 24×7 operating hours and real-time transfer advantages of the FPS, users may now top up their e-CNY wallets anytime, anywhere without having to open a Mainland bank account, thereby facilitating merchant payments in the Mainland by Hong Kong residents.”

HKMA will continue to work closely with the Chinese central bank to gradually broaden the applications of e-CNY.

This includes enhancing the functionalities of e-CNY wallets for Hong Kong residents and intensifying efforts to encourage more retail merchants in both regions to accept e-CNY.

 

Featured image credit: Edited from Freepik