Hong Kong, mainland China agree to one-stop sandbox platform allowing Greater Bay Area start-ups to develop cross-border fintech tools

South China Morning Post | | Oct 21, 2021

The monetary authorities in Hong Kong and mainland China have agreed to create a one-stop sandbox platform in the Greater Bay Area that will allow financial firms and technology companies to develop cross-border fintech products faster and at lower cost.

Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) signed a Memorandum of Understanding on Thursday to link up their sandbox supervisory platforms. The move will give start-ups the chance to test their products in a controlled environment on designated groups of customers before they are allowed to take them to the mass market.

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The joint announcement did not mention a time frame for implementation, but a spokesman for the HKMA said the authorities would encourage fintech firms to get in touch to learn more about the initiatives.

“Without such a one-stop sandbox platform, the fintech companies would need to join sandbox platforms in Hong Kong and the mainland separately. The new approach will allow them to do their experiments faster and at a lower cost, and hence will definitely encourage companies to develop more cross-border financial tools,” said Christopher Cheung Wah-fung, lawmaker for the financial services sector of Hong Kong.

“This will help to promote more cross-border payments and investment and will encourage more capital flows within the 11 cities of the Greater Bay Area. It will be a new turbocharge to push the cluster to become a global economic powerhouse.”

Since 2019, Beijing has introduced a flurry of measures to promote talent and capital flow within the bay area, which covers nine cities in Guangdong province as well as Hong Kong and Macau.
 

Eddie Yue Wai-man, chief executive of the HKMA, said the network link-up between Hong Kong’s de facto central bank and the PBOC will allow the bay area “to reinforce its leading fintech position and facilitate innovation in the region.”

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“This arrangement also strengthens fintech supervisory exchanges in an environment of rapidly advancing technology,” Yue said in a statement after announcing the link up with the PBOC.

“Deepening the cooperation between Hong Kong and the mainland in the areas of finance, technology and supervision is in line with the direction of enhancing Hong Kong’s competitive position and better integrating Hong Kong into the country’s overall development.”

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