HONG KONG, May 17 Reuters Hong Kong will allow mainland China39;s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing39;s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China39;s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using eCNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan 249.27 billion as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China39;s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peertopeer transfers will not be allowed at the moment, according to the HKMA.

By expanding the eCNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents, HKMA Chief Eddie Yue said….