New Cross-Border Payment Channel Launched, Withdrawals of Virtual Money Should Be Cautious

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

Overview of Cross-Border Payment

Cross-border payment connectivity is the interconnection of payment systems between the mainland and Hong Kong, aimed at providing convenient cross-border remittance services for residents of both regions. Key features include:

• Service object: individual residents from both places
• Northbound remittance: limited to Hong Kong identity subjects
• Southbound remittance: Limited to mainland identity subjects
• Limit on Amount:
  • Hong Kong to Mainland: Daily limit of 10,000 HKD, annual limit of 200,000 HKD
  • Mainland to Hong Kong: Follow the existing $50,000/year foreign exchange facilitation quota

Currently, multiple banks in the mainland and Hong Kong have launched this service, initially without charging any fees. In the future, it may expand to more application scenarios such as individual to enterprise and enterprise to individual.

Hong Kong Virtual Money Withdrawal Model

In Hong Kong, common methods for withdrawing Virtual Money include:

1. Offline OTC shops: Can be directly exchanged for Hong Kong dollars, but transfers do not support mainland bank accounts.

2. Licensed exchanges: such as OSL, certain DEXs, etc., but pure mainland residents cannot open accounts.

3. Securities firms: Such as Victory Securities, also have restrictions on account opening for pure mainland residents.

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

Legal Risks of Cross-Border Payment Outflows

Although the cross-border payment platform provides convenient cross-border transfer services, there are still legal risks associated with using it for Virtual Money withdrawals:

1. Northbound transfers (from Hong Kong to the mainland) require the transferor to be a resident of Hong Kong, and it is difficult for mainland residents to use even if they have a Hong Kong bank card.

2. The practice of trying to transfer funds through local Hong Kong residents also carries risks. The applicable scenarios for cross-border payment mainly include tuition payments for studying abroad, utility payments, medical treatment, salary disbursement, and so on.

3. Participating institutions must comply with anti-money laundering, anti-terrorist financing and other regulatory requirements, and establish a risk monitoring mechanism.

4. Although the cross-border payment business currently does not review the specific business background, from a compliance perspective, it is not recommended to use it for Virtual Money withdrawals and fund inflows.

Industry Trends

It is worth noting that a certain securities company recently obtained approval from the Securities and Futures Commission in Hong Kong, and its securities trading license has added virtual asset trading services. This news has led to a significant increase in the company's stock price, as well as a notable rise in the token price of a certain DEX exchange.

This trend indicates that traditional financial institutions are gradually entering the Virtual Money sector, reflecting changes in the industry landscape. However, for individual investors, caution should still be exercised when using emerging cross-border payment channels, and compliance with relevant regulations must be strictly adhered to.