Hong Kong targets gold trading, FPS-UnionPay link to boost yuan use Hong Kong will expand the use of the yuan in areas including gold trading and cross-border payments, as policy blueprints call for the city’s biggest push yet to internationalise the Chinese currency. Chief Executive John Lee Ka-chiu on Wednesday devoted part of the city’s first five-year plan and his annual policy address to developing a gold trading ecosystem and creating a regional intellectual property trading centre in the city. “We will consolidate and enhance Hong Kong’s status as an international financial centre, and stay committed to our global positioning,” the city leader said. “Hong Kong will deepen the development of its global offshore renminbi business and capital market, develop an international asset and wealth management centre and international risk management centre, enhance the securities market and expand fixed-income and commodity trading.” Lee added that the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, would introduce a tendering mechanism for seven-day offshore yuan liquidity and explore issuing short-term debt instruments to encourage wider use of the currency. A government source said the mechanism could let banks manage liquidity more easily as demand for the yuan expanded. The insider also said authorities aimed to announce the system within this year, allowing market players with yuan shortages or surpluses to trade short-term debt instruments to manage their holdings. The HKMA would also promote linking the Faster Payment System with mainland China’s bank card and payment system UnionPay by the end of the year. The move would allow users to make payments in Hong Kong dollars and renminbi while in Hong Kong, on the mainland or elsewhere, the insider said. In addition, the HKMA is also expected to encourage more foreign banks in Hong Kong to directly join the Cross‑border Interbank Payment System (CIPS) to expand the clearing network. The source said the CIPS offered banks and other institutions an alternative channel for clearing and settling transactions in yuan to the Society for Worldwide Interbank Financial Telecommunication system, better known as Swift. Under the five-year plan, authorities have pledged to “actively promote the use of renminbi to settle government expenditure”. At present, the Hong Kong government mainly uses renminbi for bond repayments and spends about 20 million yuan (US$2.98 million) monthly on welfare and medical programmes in Guangdong and civil servant training, the source said. The source said the government could use the currency more extensively in future to pay mainland suppliers. As part of its efforts to develop a gold trading ecosystem, Hong Kong will launch its central clearing and settlement system for the precious metal in the first quarter of 2027, building on its current trial operation. The insider said board members of the clearing company included Chinese and foreign institutions such as HSBC and Standard Chartered. All direct participants would need to be vetted by the board based on criteria such as experience, once it officially launched, while admission rules would also be set by the board, the source said. David Liao, HSBC co-chief executive for Asia and the Middle East, said a mature gold trading hub supported not only storage, trading, clearing, and settlement, but an ecosystem of financial products, including gold loans, inventory finance and risk management tools. The city’s stock exchange is expected to reveal details of new renminbi-denominated, physically settled gold futures contracts this year, which would boost the yuan’s global influence in terms of pricing precious metals. Authorities also set their sights on developing a regional intellectual property trading centre. The new measures include expanding the Intellectual Property Department’s in-house examination capacity for original grant patent applications in major technology fields. Other key initiatives include releasing the second-stage consultation on increasing the competitiveness of the listing mechanism by the end of this month, with the source saying authorities would see if the system could be further relaxed. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3367770/hong-kong-targets-gold-trading-fps-unionpay-link-boost-yuan-use?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post