Page 76 - 2024 Special Report on the State of Business in South China
P. 76
Financial technology of 20226. As one of the first batch pilot cities,
Shenzhen’s e-CNY transactions turnover was
With Hong Kong’s full-fledged, mature and RMB37.685 billion as of the end of December
internationalized financial markets and legal and 2022. The positive effects of e-CNY on boosting
regulatory frameworks, along with Shenzhen’s high- consumption, servicing the real economy and
end, innovative and well-developed technology monitoring capital flow are well recognized. On
production chains, the two cities can complement 22 February 2023, the first automated e-CNY
each other to cultivate world-leading advantages hard wallet card issuance machine was launched,
in the fintech industry for the GBA and jointly which provides a safe, efficient and convenient
promote cutting-edge developments. Currently, means of e-CNY payment service to Hong Kong
the following fintech areas are being developed by residents visiting Shenzhen.
the two cities:
• e-HKD
• e-CNY
The HKMA has adopted a three-rail approach
The Hong Kong Monetary Authority (HKMA) (a plan for the technology and legal foundations,
has been cooperating with the People’s Bank deep-dive user case and application with pilot
of China in piloting the use of e-CNY as a cross- runs, and implementation planning of launching
border fiat for payment, with the aim of providing e-HKD) in respect of the retail Central Bank Digital
a convenient means of cross-border payments Currency (CBDC), i.e., the e-HKD, to move toward
for the residents of Hong Kong and the Chinese the vision of being a cashless city by augmenting
mainland, enhancing the efficiency of the relevant innovations in Hong Kong’s digital economy.
services and user experience. Furthermore, On 18 May 2023, the HKMA announced the
Shenzhen has also been establishing the commencement of the e-HKD pilot program. It is a
application of e-CNY in Hong Kong and Shenzhen, key component of the second rail of HKMA’s three-
seeking to expand the application of e-CNY in rail approach. By conducting thorough research in
different areas with demonstrations across the the six categories of potential use cases, including
chain of consumer spending. The goal is to have full-fledged payments, programmable payments
e-CNY as a common payment means with wide and offline payments of e-HKD, Hong Kong will
application across the two cities. It will resolve the establish the foundation for the rollout and
long-standing issues with cross-border payment, implementation of e-HKD.
e.g., complicated process, high costs and
inefficiency, and significantly improve the cross- e-CNY has been launched for a few years.
border capital flow. Currently, Hong Kong residents can exchange RMB
6 The People’s Bank of China, Financial Statistics
Furthermore, the HKMA also cooperated with Report (April 2023)
the Digital Currency Institute of the People’s Bank
of China, the Bank for International Settlements
(BIS) and two other foreign central banks on a
joint initiative for cross-border central bank digital
currency project named mBridge. The initiative has
already been tested with real-value payment and
cross-border transactions, confirming its feasibility
and practicality. The Shanghai Clearing House
has officially launched the e-CNY clearing and
settlement services for bulk commodity business
on 26 June 2023.
According to the data of the People’s Bank
of China, the balance of e-CNY in circulation
nationally was RMB13.61 billion as of the end
76
Shenzhen’s e-CNY transactions turnover was
With Hong Kong’s full-fledged, mature and RMB37.685 billion as of the end of December
internationalized financial markets and legal and 2022. The positive effects of e-CNY on boosting
regulatory frameworks, along with Shenzhen’s high- consumption, servicing the real economy and
end, innovative and well-developed technology monitoring capital flow are well recognized. On
production chains, the two cities can complement 22 February 2023, the first automated e-CNY
each other to cultivate world-leading advantages hard wallet card issuance machine was launched,
in the fintech industry for the GBA and jointly which provides a safe, efficient and convenient
promote cutting-edge developments. Currently, means of e-CNY payment service to Hong Kong
the following fintech areas are being developed by residents visiting Shenzhen.
the two cities:
• e-HKD
• e-CNY
The HKMA has adopted a three-rail approach
The Hong Kong Monetary Authority (HKMA) (a plan for the technology and legal foundations,
has been cooperating with the People’s Bank deep-dive user case and application with pilot
of China in piloting the use of e-CNY as a cross- runs, and implementation planning of launching
border fiat for payment, with the aim of providing e-HKD) in respect of the retail Central Bank Digital
a convenient means of cross-border payments Currency (CBDC), i.e., the e-HKD, to move toward
for the residents of Hong Kong and the Chinese the vision of being a cashless city by augmenting
mainland, enhancing the efficiency of the relevant innovations in Hong Kong’s digital economy.
services and user experience. Furthermore, On 18 May 2023, the HKMA announced the
Shenzhen has also been establishing the commencement of the e-HKD pilot program. It is a
application of e-CNY in Hong Kong and Shenzhen, key component of the second rail of HKMA’s three-
seeking to expand the application of e-CNY in rail approach. By conducting thorough research in
different areas with demonstrations across the the six categories of potential use cases, including
chain of consumer spending. The goal is to have full-fledged payments, programmable payments
e-CNY as a common payment means with wide and offline payments of e-HKD, Hong Kong will
application across the two cities. It will resolve the establish the foundation for the rollout and
long-standing issues with cross-border payment, implementation of e-HKD.
e.g., complicated process, high costs and
inefficiency, and significantly improve the cross- e-CNY has been launched for a few years.
border capital flow. Currently, Hong Kong residents can exchange RMB
6 The People’s Bank of China, Financial Statistics
Furthermore, the HKMA also cooperated with Report (April 2023)
the Digital Currency Institute of the People’s Bank
of China, the Bank for International Settlements
(BIS) and two other foreign central banks on a
joint initiative for cross-border central bank digital
currency project named mBridge. The initiative has
already been tested with real-value payment and
cross-border transactions, confirming its feasibility
and practicality. The Shanghai Clearing House
has officially launched the e-CNY clearing and
settlement services for bulk commodity business
on 26 June 2023.
According to the data of the People’s Bank
of China, the balance of e-CNY in circulation
nationally was RMB13.61 billion as of the end
76
