Can cross-border payment channels be used for Virtual Money withdrawals?

Recently, the "Cross-Border Payment Link" service between the mainland and Hong Kong has officially launched, providing convenient small remittance services for residents of both regions. This service allows users to complete instant transfers using just the recipient's bank account or mobile number through a mobile application, without the need for complicated banking procedures.

However, does this convenient service apply to virtual money traders transferring their earnings from Hong Kong back to the mainland? Let's delve into this issue.

Overview of Cross-Border Payment Portal

Cross-border Payment Link is the interconnection between the Mainland "Online Payment Interbank Clearing System" and Hong Kong's "Faster Payment System". This service must comply with the legal regulations and financial supervision requirements of both regions. The usage conditions are as follows:

• Northbound remittance (Hong Kong to mainland): Limited to Hong Kong identity subjects
• Southbound remittance (Mainland to Hong Kong): Limited to Mainland identity subjects
• Limitations on Amount:
  • Hong Kong residents can remit a maximum of 10,000 HKD per day, with an annual limit of 200,000 HKD.
  • Mainland residents follow the annual foreign exchange facilitation quota of 50,000 US dollars.

Currently, several major banks in mainland China and Hong Kong have opened this service.

Hong Kong Virtual Money Withdrawal Methods

In Hong Kong, there are mainly three withdrawal methods for Virtual Money holders:

1. Offline OTC stores: You can directly exchange mainstream Virtual Money for Hong Kong dollars, supporting cash or bank transfers (limited to Hong Kong bank accounts).

2. Licensed Exchanges: Some professional trading platforms provide Virtual Money trading services, but require users to open an account. Pure mainland residents usually cannot open accounts on these platforms.

3. Securities Companies: Some securities companies have obtained licenses for Virtual Money trading, but there are also restrictions on opening accounts for pure mainland residents.

For mainland residents without a Hong Kong work visa or residence certificate, OTC stores may be the only viable option for cashing out.

Legal Risks of Using Cross-Border Payment Channels for Withdrawals

Although Cross-border Payment Channel provides a convenient way for fund transfers, there are legal risks associated with using it for Virtual Money withdrawals:

1. Identity Restrictions: Northbound transfers require Hong Kong resident status, and mainland residents find it difficult to use this system to transfer funds to the mainland even if they have a Hong Kong bank card.

2. Scope of Business Limitations: Cross-border payment services are mainly used for specific scenarios such as tuition payments for studying abroad, utility payments, medical treatment, and salary disbursement.

3. Compliance requirements: Participating institutions must fulfill compliance obligations such as anti-money laundering and counter-terrorism financing, and strengthen the monitoring of suspicious transactions.

4. Source of funds review: Although cross-border payment services do not strictly review the source of funds at present, from a compliance perspective, it is not recommended to use it for Virtual Money withdrawals and funds entering the country.

Conclusion

Recently, the attitude of the Hong Kong financial market towards Virtual Money business is changing. A major securities company has been granted permission to include virtual asset trading services under its securities trading license, sparking heated discussions in the market. This trend indicates that traditional financial institutions are beginning to actively participate in Virtual Money related businesses, reflecting changes in the financial industry landscape.