Mainland China-Hong Kong Digital Renminbi Cross-Border Pilot Accelerates

(Source: Economic Reference Daily)

A recent set of data disclosed by the Hong Kong Financial Services and the Treasury Bureau indicates that the number of digital renminbi wallets opened with Hong Kong mobile numbers has reached 80,000, and the number of local merchants accepting digital renminbi has surged from 300 to 5,200, an increase of over 16 times in one year. The Secretary for Financial Services and the Treasury, Christopher Hui, also revealed that the People’s Bank of China and the Hong Kong Monetary Authority are exploring arrangements and feasibility for upgrading digital wallets. Various signs indicate that the cross-border pilot of digital renminbi between the mainland and Hong Kong is advancing rapidly.

In 2024, the cross-border digital payment platform for digital renminbi (which has now been upgraded to the “DCEP Connect” cross-border service) will achieve interoperability with Hong Kong’s Faster Payment System (hereinafter referred to as “FPS”) and be incorporated into the “Three Connections, Three Conveniences” policy, supporting all residents of Hong Kong to open wallets and use digital renminbi. This is the world’s first bilateral interoperability of a legal digital currency system and payment system, supporting Hong Kong users to open four types of personal digital renminbi wallets through the digital renminbi app in Hong Kong and pilot areas in the mainland, and allowing residents of Hong Kong and Macao to upgrade their wallets online using their Mainland Travel Permit for Hong Kong and Macao Residents. Additionally, it supports charging digital renminbi wallets through Hong Kong local banks’ Hong Kong dollar accounts and completing online and offline retail consumption via “tap to pay,” barcode payments, and wallet quick payment. The latest data shows that the number of Hong Kong local banks participating in the value-added digital renminbi wallet of “FPS” has increased to 18.

In fact, “DCEP Connect” (CBETS) is a new type of bilateral cross-border service launched by the International Operational Center for Digital Renminbi, guided by the Digital Currency Research Institute of the People’s Bank of China. It consists of the cross-border digital payment platform for digital renminbi and the digital renminbi blockchain service platform, supporting overseas participants to access the digital renminbi cross-border business gateway with “one-point access,” providing 7×24-hour intelligent digital payment services directly to both on-chain and off-chain business platforms.

Industry insiders indicate that the cross-border pilot of digital renminbi between the mainland and Hong Kong has validated the feasibility and robustness of the digital renminbi system in cross-border payment scenarios through a large number of real transactions, providing innovative solutions for forming a demonstration effect of bilateral cooperation, facilitating the alignment of operational rules and mechanisms between the two regions, and enhancing the level of market integration in the Guangdong-Hong Kong-Macao Greater Bay Area.

As the digital renminbi evolves from digital cash to digital deposit currency, Hong Kong users and participating institutions have also put forward new business demands, hoping to provide more comprehensive digital renminbi wallet services in Hong Kong. According to Christopher Hui, the People’s Bank of China and the Hong Kong Monetary Authority are discussing arrangements and feasibility for upgrading digital wallets, aiming to increase the usage limits of digital wallets, expand application scenarios, and enhance user experience.

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