In a significant move towards improving the use of digital currency, Hong Kong residents can now create personal digital yuan or e-CNY wallets, such as announcement by the Hong Kong Monetary Authority (HKMA).
This development, which is part of a collaboration with the People’s Bank of China (PBoC), marks an important step in the “facilitation” of cross-border transactions between Hong Kong and mainland China.
The introduction of these wallets is expected to expand the use of The Chinese digital yuanor e-CNY, supporting more organized and direct payments without the need for a mainland bank account.
Expansion of the use of the digital yuan
The HKMA revealed that this initiative aims to expand the scope of digital currency use between residents and “enhance the interoperability” of financial systems across borders. Residents can easily set up their e-CNY wallet using their Hong Kong mobile number.
Additionally, the supported infrastructure, especially the Faster Payment System (FPS), allows users to top up their e-CNY wallets at 17 retail banks in Hong Kong. However, the system was initially designed to prioritize merchant payments on the mainland over person-to-person transfers in Hong Kong.
Notably, as the report reveals, this expansion is part of the “three connections, three facilitations” initiative announced by the PBoC earlier in the year.
With these developments, the HKMA said it is striving to “expand the applications of e-CNY and enrich the range of features of the e-CNY wallet available to Hong Kong residents.
HKMA’s plans for e-CNY
Eddie Yue, Managing Director of the HKMA, highlighted the strategic importance of this pilot program. He noted that Hong Kong was a “pioneer” in facilitating cross-border trade. use of digital yuan“improving payment efficiency for Hong Kong residents” on the mainland.
Yue further revealed that the collaboration aims to gradually increase e-CNY applications and “enrich the features” available to residents. Additionally, it is planned to promote the acceptance of e-CNY by more retail merchants in both regions, thereby improving the overall user experience.
The efforts go beyond personal use; Enterprise use cases are also being explored to facilitate cross-border trade settlements. The aim is to take the e-CNY wallet to higher levels through “real name verification” and improve payment interoperability.
This would provide a more convenient experience for individuals and merchants and promote the interconnectivity of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). The report noted:
The HKMA will continue to work with the DCI to explore upgrading the e-CNY wallet to higher levels through real name verification and improving payment interoperability to provide more convenient user experiences, whether for individuals or traders.
Featured image from VCG via Getty Images, chart from TradingView
