Published: 20:31, May 17, 2024 | Updated: 21:01, May 17, 2024
Easier payments seen for HK residents with e-CNY pilot expansion
By Li Xiaoyun in Hong Kong

(From left) Kitty Lai, head of financial infrastructure development at the Hong Kong Monetary Authority; HKMA Deputy Chief Executive Howard Lee; and Colin Pou, executive director of financial infrastructure at the HKMA, reveal the details of expanding the cross-boundary e-CNY pilot in Hong Kong on May 17, 2024. (LI XIAOYUN/ CHINA DAILY)

The Hong Kong Monetary Authority on Friday announced it will expand the scope of the digital renminbi (e-CNY) pilot program for cross-boundary payments in Hong Kong.

The move is a bid to make it easier for Hong Kong residents to set up and use e-CNY wallets, as well as top up their wallets via local e-payment tool.

The expansion enables users to download the e-CNY wallet app from Google Play or the App Store, and register for and use its services only with their Hong Kong mobile numbers

As one of the six measures unveiled by the People’s Bank of China — the country’s central bank — earlier this year to cement Hong King’s status as a hub of offshore renminbi business, the expansion enables users to download the e-CNY wallet app from Google Play or the App Store, and register for and use its services only with their Hong Kong mobile numbers.

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Moreover, users can now top up their e-CNY wallets via the Faster Payment System through 17 retail banks in the city, including DBS, the Bank of China (Hong Kong) and the Bank of East Asia, without the need to have a mainland bank account. Eleven of the banks support real-time conversion of Hong Kong dollars to renminbi for wallet top-ups. Users can also link a credit card for topping up.

“Hong Kong is the first place outside the Chinese mainland that enables its residents to set up e-CNY wallets locally,” said HKMA Chief Executive Eddie Yue Wai-man, adding that this move will facilitate merchant payments on the mainland by Hong Kong residents.

In addition to the mainland cities of the Guangdong-Hong Kong-Macao Greater Bay Area, the wallets can also be used in 25 other pilot provinces and cities. The wallet enables cross-border payments, but cannot be used for person-to-person transfers.

Staff members of the four operating banks involved in the cross-boundary e-CNY pilot program discuss the e-CNY wallet on May 17, 2024. (LI XIAOYUN/ CHINA DAILY)

The applications of the e-CNY wallet are expected to gradually expand beyond the current retail payments, as efforts to enable users to settle bills and pay for public transportation are underway.

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The limit of personal wallet is set at 2,000 yuan ($277) per transaction. The daily cumulative payment limit is 5,000 yuan, while the cap for annual payment is 50,000 yuan. The maximum balance is 10,000 yuan.

HKMA Deputy Chief Executive Howard Lee Tat-chi said the HKMA will continue to work with the Digital Currency Institute of the PBoC to upgrade the wallet through real-name verification, and explore use cases for businesses with a view to facilitate cross-boundary trade settlements.

Four e-CNY wallet operating institutions — the Bank of China, Bank of Communications, China Construction Bank, and the Industrial and Commercial Bank of China — are currently involved in the pilot program. They have introduced cash rewards or consumption vouchers to attract users.

E-CNY is legal tender in digital form issued by the PBoC. Pegged 1:1 with the physical renminbi, the digital currency has been undergoing pilot programs since 2019.

READ MORE: China's Shenzhen sets up over 35 million e-CNY wallets

The expansion of the program in Hong Kong has had four rounds of technical testing as well as drills involving bank employees, merchants and retail banks that started in December 2020.