, the pboc is accountable to the state council and the branches of the pboc are accountable to the headquarters. as mentioned earlier, although hong kong has been subject to a severe ordeal during the financial turmoil, the pboc and other mainland government departments have not interfered in hong kong ’ s monetary affairs. furthermore, our autonomy in the management of hong kong ’ s foreign reserves is an important element in the mutual independence between the two monetary authorities. 13. while maintaining a mutually independent relationship, the two monetary authorities will continue to maintain and strengthen further the existing sound co - operation between the two places. both parties have held several regular and ad hoc discussions about monetary management, crossborder supervision of financial institutions and linkages between payment and settlement systems, and the achievements in these fields have been many. the mutual trust between the hkma and the pboc has contributed to exchanges and co - operation between the two places in relation to monetary affairs. ( c ) financial business between the mainland and hong kong are treated as international financial affairs and are conducted in accordance with the rules and practices of international financial activities. 14. all financial transactions between the two places after the handover have been conducted according to the rules and practices of international financial activities. claims and liabilities between banks and companies from the mainland and those in hong kong are regarded as external claims and liabilities. investment by hong kong companies in the mainland is regarded as foreign investment. when raising funds in hong kong, mainland entities are treated as other international and local market participants. mainland companies listed in hong kong are required to abide by security laws of hong kong and are regulated by the relevant regulatory authorities in hong kong. disputes relating to financial transactions are handled in accordance with international practice. where china ’ s arbitration law and other relevant laws and regulations are applicable according to the terms of a contract, the provisions relating to arbitration involving foreign parties are applied. ( d ) the hksar maintains its existing system of currency issuance and management. the hong kong dollar and the renminbi continue to circulate as legal tender in hong kong and the mainland respectively. the hong kong dollar is treated as a foreign currency in the mainland. likewise, the renminbi is treated as a foreign currency in hong kong. 15. the basic law has provided for the legal status of the hong kong dollar. the renminbi is still not yet freely convertible. however, even if it becomes freely convertible, it will only be one of

yves mersch : the future started yesterday keynote speech by mr yves mersch, member of the executive board of the european central bank, at the bank of latvia conference “ payments in the 22nd century : future starts today? ”, riga, 3 october 2018. * * * predicting what payments will look like in the 22nd century is perhaps better left to science fiction writers than to central bankers. still, at least one thing i can be sure of is that payments will be instant or cash - like. and we don ’ t need to wait for the 22nd century to see this happen. non - cash instant payments are a reality today in several places around the world. this includes europe : last year already saw the launch of the sepa instant credit transfer ( sct inst ) scheme, developed by the european payments council at the request of the euro retail payments board. banks from the baltic countries were among the first to embrace instant payments, with a number of them joining the scheme from day one. however, we are now at a critical stage for implementing instant payments. the number of banks offering instant payment services to their clients is steadily increasing, as is the use of such services by european people and businesses. in november we will launch target instant payment settlement ( tips ) : the eurosystem service for instant payment settlement across europe in central bank money. with this service, the eurosystem is addressing the evolving needs of market participants and supporting market integration by facilitating pan - european reach at a time when the issuance of its new series of safe and widely - trusted banknotes is nearing completion. an opportunity for the european payments industry the move towards instant payments is not just good news for end users ; it is also good news for the european payments industry. cards are now the most popular and fastest - growing non - cash payment instrument in europe, and many of the most prominent innovations in payments are card - based. think of contactless payments and mobile wallets, as well as many online payment solutions. this area is dominated by non - european players, with international card schemes taking the lead. european players are lagging behind, not least because of the lack of a pan - european card scheme or even interoperable card networks. in this context, we should strive for a truly paneuropean instant solution rather than repeat past shortcomings. thanks to instant payments, european market players can now become leaders in innovation, based on european standards. the sct inst scheme and the