Despite the political tensions between China and Hong Kong, it looks like their financial relationship is progressing as China just endorsed a development agreement with Hong Kong’s factual ‘central bank’.
The news was confirmed by the Hong Kong Monetary Authority (HKMA) via a news post from November 6th that announced the Memorandum of Understanding (MoU) that was signed with a branch of the People’s Bank of China.
The aim is more convenience
The memorandum was created with the intention to develop a trade finance platform proof-of-concept, starting from Q1 2020. The new platform should connect their two live projects: the Bank of China’s Trade Finance Platform and HKMA’s eTradeConnect.
Of course, the two banks will be represented by subsidiaries in this mutual effort – the Institute of Digital Currency from the Chinese side and the Hong Kong Interbank Clearing Limited.
As the news post explains:
“Once the connection has successfully been established, it will provide firms in both places with more convenient trade finance services and enable banks in Hong Kong to expedite the expansion of their trade finance business.”
China’s investment in blockchain technology
The warm Chinese embrace of blockchain technology has been ratified by president Xi Jinping who personally called to its usage throughout the country with the aim to boost the economy.
As regional financial media China Money Network noted on Wednesday, this endorsement is on full throttle already. Regional governments and other organizations guaranteed blockchain funds of $5.7 billion for additional support.
Part of this almost $6 billion is a $14.3 million fund (100 million yuan) from 1911 Group.
Eddie Yue, who is the HKMA chief executive, commented on the signing of the memorandum:
“To lift Hong Kong’s fintech development to a new height, we must take a holistic ‘HK Inc.’ approach.”