Hong Kong Monetary Authority steps up e-CNY pilot

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” 

Eddie Yue, chief executive of the HKMA, said, “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.”

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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