The cross-border payment link, which connects the Mainland's Internet Banking Payment System (IBPS) with Hong Kong's Faster Payment System (FPS), is set to launch on June 22, 2025. This integration will facilitate real-time transactions and significantly streamline cross-border payments.
Integration of Payment Systems
The integration of IBPS and FPS will allow transactions in renminbi and Hong Kong dollars, making the cross-border payment process more efficient. It is expected to reduce transaction costs and enhance overall efficiency, positively impacting trade and economic relations between Mainland China and Hong Kong.
Market Reaction
The market reacted positively to the announcement of the integration. Pan Gongsheng, the Governor of the PBOC, emphasized the project's role in promoting regional cooperation. Eddie Yue, the Chief Executive of the HKMA, advocated for harmonizing the regulatory environment to ensure consistency and compliance in cross-border transactions.
Historical Precedents and Market Impact Potential
Cross-border payment systems, like Singapore’s PayNow and Thailand’s PromptPay, have historically shown increased transaction volumes, setting precedents for similar initiatives in the region. The Coincu research team suggests that enhanced fiat rails could support the development of the digital yuan and HKD stablecoins.
The launch of the cross-border payment system in 2025 is expected to be a significant milestone for the financial landscape of Hong Kong and Mainland China, fostering greater financial integration and simplifying transactions between the regions.
