New Channel for Cross-Border Payments Launched, Caution Needed for Converting Virtual Money

Recently, the "Cross-Border Payment Link" service between the mainland and Hong Kong has been officially launched, providing residents of both regions with a convenient small remittance service. This new service has sparked discussions about the withdrawal of Virtual Money. This article will conduct an in-depth analysis of this.

Introduction to Cross-Border Payment Channels

Cross-border payment services connect the "Online Payment Interbank Clearing System" in Mainland China and the "Faster Payment System" in Hong Kong. It complies with the legal regulations and financial supervision requirements of both regions and is mainly aimed at individual users. Northbound remittances (from Hong Kong to Mainland) are limited to Hong Kong identity subjects, while southbound remittances (from Mainland to Hong Kong) are limited to Mainland identity subjects.

In terms of daily remittance limits, the cap for Hong Kong residents remitting to the mainland is 10,000 Hong Kong dollars, and the annual limit is 200,000 Hong Kong dollars. Mainland residents remitting to Hong Kong are subject to an annual foreign exchange facilitation limit of 50,000 US dollars.

Currently, the service does not charge fees in the initial stage. The participating banks include the six major banks in mainland China and six major banks in Hong Kong. In actual use, cross-border transfers can be completed within ten seconds without the need for additional currency exchange procedures.

Hong Kong Virtual Money Withdrawal Methods

In Hong Kong, there are mainly three ways to withdraw Virtual Money.

1. Offline OTC stores: You can directly exchange mainstream Virtual Money for Hong Kong dollars, but transfers usually do not support mainland bank accounts.

2. Licensed exchanges: such as certain professional trading platforms, but usually do not accept pure mainland residents for account opening.

3. Securities companies: Some securities companies offer Virtual Money trading services, but they also restrict pure mainland residents from opening accounts.

For mainland residents without a Hong Kong work visa or residence proof, it currently seems that they can only withdraw funds through OTC stores.

Legal Risks of Using Cross-Border Payment for Fund Withdrawal

Although cross-border payment channels provide convenient fund transfer options, there are still legal risks associated with using them for Virtual Money withdrawals:

1. Identity restrictions: Northbound transfers require Hong Kong resident status, and mainland residents find it difficult to use even with a Hong Kong bank card.

2. Scope of Business Limitations: This service is mainly applicable to scenarios such as tuition payment for studying abroad, utility bill payment, medical treatment, and salary distribution.

3. Compliance Requirements: Participating institutions must comply with cross-border capital settlement management regulations, fulfill anti-money laundering and other compliance obligations, and monitor suspicious transactions.

4. Remittance Purpose Review: Although the cross-border payment channel may not strictly review the business background at present, from a compliance perspective, it is not advisable to use it for Virtual Money related transactions.

Conclusion

With a securities company obtaining approval from the Hong Kong Securities and Futures Commission to increase virtual asset trading services, the integration of the virtual money market and traditional finance is accelerating. However, for individual users, it is still necessary to exercise caution when using emerging cross-border payment channels for virtual money-related transactions and to fully understand the associated legal risks.