Hong Kong Monetary Authority steps up e-CNY pilot

In order to help residents use the currency in Hong Kong, the HKMA has linked the digital currency with the Faster Payment System. In addition, corporate use cases for cross-boundary trade settlement will be explored.

The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) have expanded the scope of a e-CNY pilot in Hong Kong to allow residents to use e-CNY wallets by Hong Kong residents, as well as the top-up of e-CNY wallets through the Faster Payment System (FPS).   

The interoperability between the FPS and the e-CNY system operated by the Digital Currency Institute (DCI) of the PBoC also marks the first linkage of a FPS with a central bank digital currency system in the world.

The expansion of the cross-boundary e-CNY pilot in Hong Kong is one of the six measures announced by the PBoC in January under the “three connection, three facilitation” initiative. 

Users can now set up e-CNY personal wallets in Hong Kong using their mobile phone numbers. The e-CNY wallets can be used for cross-boundary payments but cannot be used for person-to-person transfers. 

Users can top up their e-CNY wallets via the FPS through 17 retail banks in Hong Kong. In addition to the Greater Bay Area (GBA), the e-CNY can also be used in several other mainland pilot areas. Progress is being made on the interoperability of e-CNY with "traditional e-payment service providers in the mainland" the HKMA said.

Anytime, anywhere ambition 

Eddie Yue, chief executive of the HKMA, said, “By expanding the e-CNY pilot in Hong Kong and leveraging the 24x7 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.”

However, currently it is understood that only around 300 retailers accept e-CNY in Hong Kong. 

Yue added: “We will continue to work closely with the PBoC to gradually expand the applications of e-CNY, enrich the range of functionalities of the e-CNY wallet available to Hong Kong residents and step up efforts in promoting the acceptance of e-CNY by more retail merchants in the two places.”

The HKMA said it will work with the  DCI to explore upgrading the e-CNY wallet, for example through name verification. Additionally, corporate use cases will be explored with a view to facilitating cross-boundary trade settlement. 

The aim is also to enhance the efficiency and user experience of cross-boundary payments, and promote the interconnectivity of the GBA, the HKMA said

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