Hong Kong Expands Digital Yuan Use, Plans to Raise Wallet Limits

Hong Kong is expanding the use of China’s digital yuan for retail and cross-border payments. More merchants now accept it, so residents and visitors can use it more easily. Authorities are also looking at improved wallet functions and larger transaction limits.

Current Wallet Limits and Potential Changes

Since the pilot program expanded in May 2024, Hong Kong residents can use e-CNY wallets at more stores. Each payment is limited to RMB 2,000 ($280), with a yearly limit of RMB 50,000 ($7,000) and a wallet balance of RMB 10,000 ($1,400). Opening a wallet is easy, needing only a Hong Kong mobile number and no mainland bank account or real-name check.

Authorities are looking at these limits. Christopher Hui, Secretary for Financial Services and the Treasury, said talks with the People’s Bank of China may raise the caps and add new wallet features. The aim is to help residents who travel or do business across the border while keeping regulations in place.

Lawmakers want clearer rules on real-name verification and higher transfer limits. The wallets in Hong Kong might eventually offer the same capabilities as those in mainland pilot cities. No date has been specified, but upgrades could be implemented soon.

How Is the Digital Yuan Expanding in Hong Kong?

The Hong Kong Monetary Authority (HKMA) has been encouraging banks to get more retailers to accept e-CNY. Secretary Hui said the program gives residents a safe and convenient payment option and makes cross-border transactions more efficient. The HKMA works with the PBoC’s Digital Currency Research Institute and Hong Kong branches of mainland banks to track use and gather feedback from early users.

Retail adoption is slowly growing, though detailed data on merchants across Hong Kong Island, Kowloon, and the New Territories is limited. Authorities are also promoting e-CNY for wider financial use. Hong Kong participates in the mBridge project, enabling banks across regions to settle payments directly. This has the potential to reduce cross-border costs and simplify financial transactions.

Officials are planning more cooperation with commercial banks and public institutions to expand e-CNY, showing a clear strategy to include the digital yuan in both everyday and institutional payments.

Opportunities for Digital Yuan Use

Authorities plan to expand e-CNY beyond regular retail payments. Future uses could include supply chain finance, cross-border payroll, and other business services. The rollout will be gradual, considering technology, regulations, and user needs.

Since May 2024, residents can add money to their wallets at 17 banks using the Faster Payment System. Cross-border service covers 26 mainland pilot areas, especially the Guangdong-Hong Kong-Macao Greater Bay Area. Hong Kong is now an important test site for e-CNY outside the mainland.

Future Developments

Hong Kong’s digital yuan program is slowly expanding, giving people and businesses more ways to use e-CNY for shopping and cross-border payments. Plans to raise wallet limits and add features show that authorities want the digital currency to be practical and easy to use.

With support from local banks and pilot projects in the Greater Bay region, Hong Kong is becoming an important place to test e-CNY outside mainland China. These steps provide useful lessons for wider adoption and future improvements.