The intention is that it should encompass not only the best, internationally agreed, principles of payment system design but also state-of-the-art technology. Leveraging on the technology used for the existing Hong Kong dollar RTGS system, this US Dollar Clearing System will offer a range of advanced and sophisticated clearing functions. These will include linkage with the Hong Kong dollar payment system to provide real time PvP settlement for US dollar-Hong Kong dollar transactions, as well as linkages with the stock and debt securities clearing houses to provide DvP settlement. For the general public, the System will enable banks to offer US dollar cheque deposit accounts, which means that US dollar payments can be discharged through the writing of a cheque in US dollars drawn upon a bank in Hong Kong. The various features of the system will be introduced in phases. All being well, we hope to see real-time interbank payments and PvP for US dollar-Hong Kong dollar foreign exchange transactions introduced by the third quarter of this year and US dollar paper cheque clearing and a linkage with the HKMA’s Central Moneymarkets Unit completed by the end of the year. People have asked whether we propose to introduce clearing in other foreign currencies once the US dollar system is established. In principle this would be possible. In practice there needs to be a business case. The HKMA is certainly ready to respond if there appears to be market demand for similar clearing systems for other major currencies.
Mr Yam looks at the benefits a US dollar clearing system will bring to Hong Kong  Speech by Mr Joseph Yam, Chief Executive, Hong Kong Monetary Authority, at the Signing Ceremony for the US Dollar Clearing System, Hong Kong, on 9 March 2000. *  *  *  It is a pleasure to welcome you all to this afternoon’s signing ceremony. The purpose of the ceremony is for the HKMA formally to appoint HSBC as the Settlement Institution for the new US dollar clearing system that will be developed in Hong Kong over the coming months. When it is fully running - prospectively by the end of the year - this system will enable a wide range of financial transactions in US dollars to be settled here in Hong Kong, many of them on a real time basis. The project marks an important milestone in the development of Hong Kong’s financial infrastructure and it should help to consolidate Hong Kong’s position as an international financial centre. Developing Hong Kong’s financial infrastructure is, along with maintaining currency and banking stability, one of the three main policy objectives of the HKMA. Financial infrastructure, when it works efficiently, is something that is so much taken for granted that it is barely noticed. It is a far less prominent public issue than currency or banking stability. Yet, without a properly working financial infrastructure, there is little chance of currency and banking stability.