However, the governing model of “one country two systems” provides a testing ground for cross-boundary financial innovation, with mainland China and Hong Kong signing a similar MOU in October, vowing to improve fintech supervisory exchanges.
That MOU called for linking up the PBOC’s and HKMA’s regulatory facilities on fintech innovation and fintech supervisory sandbox. The aim of the agreement is to create a network that will make it easier for fintech companies in mainland China and Hong Kong to set up cross-border businesses.
“The ‘network link-up’ aims to provide a ‘one-stop platform’ to allow eligible financial institutions and technology firms to conduct pilot trials of cross-boundary fintech initiatives, concurrently in Hong Kong and the mainland’s Greater Bay Area cities,” the HKMA said.
A month earlier, Yue said the development of the bay area is a key strategic direction for China’s 14th Five-Year Plan, which emphasises high-quality economic growth driven by technology innovation.
The same month, Macau’s monetary authority said it would set up its own fintech regulatory framework, allowing companies and financial institutions in the region to roll out pilot programmes to “a limited number of participating clients”.
Macau’s de facto central bank said the pilot programmes will allow fintech firms to gather early user feedback on their projects, expedite their efficiency, and reduce development costs.
Fintech development in the Greater Bay Area has been attracting the attention of economic planners, with regulators and bankers calling for broader capital flow between Hong Kong and the rest of the bay area cities to advance the region’s economy.
“I think we should take a bolder step in building a special bridge between Hong Kong and the Greater Bay Area,” Norman Chan Tak-lam, the former CEO of HKMA said at the Global Financial Leaders’ Investment Summit on Tuesday.
Chan, who retired in 2019, called for “freer movement of capital” within the bay area using blockchain, saying that the technology could be used to test its impact on capital raising and other cross-boundary economic activities.