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Daisy Wu

Hong Kong’s top financial regulators have urged local banks to make greater use of the city’s growing pool of offshore yuan liquidity, while also flagging the need to prepare for a coming wave of autonomous AI systems used in the financial sector.
Speaking at the Hong Kong Association of Banks (HKAB) Distinguished Speaker Luncheon, Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), called on lenders to leverage their international networks to expand the Chinese currency’s global reach.
“We want your bank to use your global network to help us channel all this renminbi liquidity to the world,” Yue said.
Regulators, he added at the Friday luncheon, were prepared to scrap the funding cap on Hong Kong’s yuan liquidity facility altogether if demand continued to grow. The specialised facility, which provides commercial banks with yuan funding that can then be lent to customers, currently operates under a 500 billion yuan (US$74.5 billion) quota, expanding from the previous 200 billion yuan in July.
“There will not be any cap to it,” Yue said, adding that the facility’s quota could be expanded as demand increased and existing capacity was well used. He also urged lenders to report operational problems and difficulties faced by clients so the system could be refined.
The push comes as yuan-denominated transactions accounted for about 30 per cent of China’s total trade settlement last year, up from 13 per cent in 2019, Goldman Sachs found in May. The shift has coincided with rapid growth in dim sum bonds – yuan-denominated bonds issued in Hong Kong – as well as offshore Chinese government bonds.
However, Hong Kong’s Securities and Futures Commission (SFC) chief executive Julia Leung Fung-yee cautioned that wider international use of the yuan could stall unless financial institutions developed a deeper suite of yield-bearing and risk-hedging products.
“If the renminbi that foreign companies obtain from trade is just swapped back into US dollars immediately … there’s no point of internationalisation,” she said, calling for “a broader and deeper renminbi ecosystem”.
Leung said the SFC was technically ready to extend Hong Kong’s dual-counter stock trading model to Southbound Stock Connect flows – a change that would allow mainland investors using the scheme to buy and settle Hong Kong-listed shares directly in yuan.
She also pointed to HKEX’s five-year China Government Bond futures contract, launched in August, as a new hedging tool.
The panel, moderated by HKAB chairman and Bank of China (Hong Kong) chief executive Sun Yu, also discussed how AI and other financial technologies were reshaping the sector.
Sun said developments in fintech and Beijing’s “AI Plus” initiative – elevated to a top national priority under the 15th five-year plan – were driving major changes across the city’s wealth management and capital markets.
Leung cited January’s back-to-back Hong Kong listings of Z.ai, also known as Zhipu AI, and MiniMax as early evidence that the city’s markets were benefiting from the sector’s growth.
She disclosed that the SFC was weighing further regulatory guidance for financial firms deploying “agentic” AI systems – software capable of executing complex, multi-step tasks with limited direct human intervention.
On the banking side, HKMA chief Yue said the monetary authority was co-developing an AI explainability toolkit with the Bank for International Settlements Innovation Hub, the United Kingdom’s Financial Conduct Authority and the Saudi Central Bank. Testing is due to begin next quarter.


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Regulators want banks to channel more offshore yuan into global markets, as the city pushes to deepen the currency’s role in international finance


Regulators want banks to channel more offshore yuan into global markets, as the city pushes to deepen the currency’s role in international finance.


Hong Kong’s yuan pool is growing. Can it turn liquidity into global demand?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Regulators want banks to channel more offshore yuan into global markets, as the city pushes to deepen the currency’s role in international finance

Regulators want banks to channel more offshore yuan into global markets, as the city pushes to deepen the currency’s role in international finance