Use of yuan hits 6-month high in Hong Kong’s fast-payment system Hong Kong’s fast-transfer payments denominated in yuan surged to a six-month high in July, signalling accelerating adoption of real-time cross-border retail payment channels even as mainland Chinese authorities maintain tight controls on capital outflows. Transaction values through Hong Kong’s Faster Payment System (FPS) for yuan reached 35.03 billion yuan (US$5.19 billion) in July, marking a 34 per cent increase from February, according to official data published by Hong Kong Interbank Clearing Ltd (HKICL) on Tuesday. On a year-on-year basis, transaction value increased 16.8 per cent. Analysts attributed the sharp uptick to the expanding commercial scope of Payment Connect – a joint cross-border infrastructure project launched in June 2025 by the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China – alongside broader demand for renminbi assets. By directly linking Hong Kong’s FPS with mainland China’s internet banking payment system, the channel enables instantaneous, small-value cross-border transfers. Usage has increasingly expanded into everyday retail transactions, including university tuition, medical expenses and cross-boundary salary remittances. “The rise in renminbi FPS transactions reflects a broader structural trend of growing renminbi payment demand, and Payment Connect is an additional catalyst by expanding cross-border use cases,” said Gary Ng, senior economist for Asia-Pacific at Natixis Corporate and Investment Bank. The growth was also “partially due to the ongoing migration of payment infrastructure” towards the FPS system, he added. By channelling cross-border flows through closed-loop systems like Payment Connect, mainland regulators could advance the currency’s global footprint while maintaining strict controls over capital outflows to prevent illegal capital flight, market observers noted. As part of this ongoing oversight, major offshore lenders are stepping up client due diligence to ensure compliance with anti-money-laundering guidelines and capital control frameworks. HSBC Hong Kong recently notified certain mainland investment clients, requiring them to submit a self-declaration confirming their funding sources via its mobile app by September 12, according to an online notice seen by the South China Morning Post. An HSBC spokesperson replied that “the latest declaration request applies solely to our investment services customers”. The transaction momentum coincides with Beijing’s intensified campaign to internationalise the yuan and hedge against US dollar-dominated financial systems amid ongoing geopolitical friction and global trade realignment. In July, HKICL said, total yuan transactions across all clearing channels in Hong Kong reached 51.74 trillion yuan (US$7.67 trillion), significantly higher than Hong Kong dollar transactions at HK$42.69 trillion (US$5.44 trillion) and US dollar transactions at US$2.26 trillion. The PBOC has highlighted expanding the international role of the yuan, bolstering offshore liquidity and upgrading cross-border payment architecture as core priorities in its strategic blueprint for the next five years. Meanwhile, the HKMA recently expanded the city’s renminbi liquidity facility to 500 billion yuan and extended funding tenors to up to three years, while continuing to scale up China’s foreign exchange reserve allocations in the city to solidify its status as the premier offshore yuan hub. https://www.scmp.com/business/banking-finance/article/3364413/use-yuan-hits-6-month-high-hong-kongs-fast-payment-system?module=top_story&pgtype=section (ICE HONG KONG)

Fonte notizia: South China Morning Post