Hong Kong Launches First-Ever Cross-Border Digital Yuan Payment System

By: Isha Das

The People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) have taken significant steps to expand the Digital Yuan (e-CNY) beyond mainland China. On May 17, the HKMA announced a pilot scheme enabling the use of the Central Bank Digital Currency (CBDC) for cross-boundary payments. This e-CNY scheme is expected to provide safer, more convenient, and innovative cross-border retail payments between Hong Kong and Mainland residents.

Cross-Border Transactions

The initiative allows Hong Kong residents to set up personal e-CNY wallets using their mobile numbers, though peer-to-peer transactions among Hong Kong residents are not permitted. These digital yuan wallets can be funded through 17 retail banks via the Faster Payment System (FPS). Eddie Yue, Chief Executive of the HKMA, highlighted that the e-CNY application and wallet would gradually gain more functionality as more retailers adopt the system.

The HKMA plans to upgrade e-CNY wallets through real-name verification and aims to support corporate cross-border trade settlements in the future. This endeavor advances China's efforts to popularize its CBDC program, which is already in use for paying some workers' monthly salaries.