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Hong Kong Launches Personal e-CNY Wallets For Cross-Border Payments

Hong Kong became the first region outside mainland China to allow users to open digital wallets and hold China’s CBDC e-CNY, otherwise known as the digital yuan on Friday.

The Hong Kong Monetary Authority (HKMA), the city’s central bank, announced that permanent residents and foreign nationals living in Hong Kong can now open e-CNY wallets using their local mobile phone numbers with four major mainland Chinese state-owned banks.

HK Residents and Expats Can Now Open e-CNY Wallets

The accredited banks licensed to facilitate the CBDC wallet opening are the Bank of China, the Bank of Communications, the China Construction Bank, and the Industrial & Commercial Bank of China.

HKMA and People’s Bank of China have expanded the scope of the e-CNY pilot in Hong Kong.

Key benefits for HKers: Open e-CNY wallets with HK mobile number Top up e-CNY wallets via FPS provided by 17 HK banksUse e-CNY to make retail payments in the Mainland pilot cities pic.twitter.com/SF5GxJXp8H

— HKMA 香港金融管理局 (@hkmagovhk) May 17, 2024

“Unlike conventional digital wallets, the e-CNY wallet has the full endorsement of the People’s Bank of China,”Howard Lee, the Hong Kong Monetary Authority (HKMA) Deputy Chief Executive, emphasize.

He added that the key objective of the digital yuan is to provide Hong Kong residents with a “safe and convenient option for cross-border payments” when traveling to the Greater Bay Area integration zone, which comprises Hong Kong, Macao, and nine cities in Guangdong province.

Recall that Crypto News reported in January 2024 that the Chinese central bank plans to expand the digital yuan to Hong Kong to foster cross-border payment.

Hong Kong’s retailers are concerned, however. They believe there is more demand for mobile payment in mainland cities like Shenzhen, where shopping and dining are predominant, which could divert consumption away from the city.

Currently, around 300 merchants in Hong Kong accept e-CNY payments, subject to certain limits. Individual wallet balances are capped at ¥10,000 ($1,380), and single transactions are limited to ¥2,000, while annual spending is restricted to ¥50,000.

HK residents can top up their wallets via Hong Kong’s Faster Payment System (FPS), which has been integrated with the e-CNY payment infrastructure.

The HKMA Plans “Big Move” Towards Yuan Internationalization

Senior economist at Natixis Hong Kong Gary Ng described the development as “a big move compared to the past” in promoting the yuan’s internationalization. He expects more companies to adopt the system going forward.

According to the latest figures released by the People’s Bank of China, domestic transactions facilitated by the digital yuan reached a staggering 1.8 trillion yuan (approximately $249 billion) as of the end of June 2023. The surge in usage has been driven by the opening of over 120 million individual e-CNY digital wallets nationwide, with over 29 million digital yuan wallets opened in Suzhou.

Despite these growths, many workers actively convert their e-CNY into fiat currency, indicating a clear preference for physical cash. As CryptoNews reported, Chinese workers are hesitant to use CBDC due to its perceived lack of utility and privacy concerns.

The post Hong Kong Launches Personal e-CNY Wallets For Cross-Border Payments appeared first on Cryptonews.

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