Hong Kong banks received approval from the central government to conduct business in renminbi (RMB) in a move that will spur cross-border economic activity and further link the territory's financial system to the mainland.
Under the scheme banks in Hong Kong will be able to provide RMB deposit, remittance, exchange and credit card services.
Mainland banks can now issue RMB debit and credit cards to Chinese nationals for use in Hong Kong. In turn, Hong Kong residents are able to use RMB cards on the mainland.
A settlement bank will be chosen in Hong Kong that will provide RMB clearing services and act as a conduit for currency flows back to China.