The issue of banknotes of the Hong Kong dollar is governed in the Special Administrative Region of Hong Kong by the Hong Kong Monetary Authority (HKMA), the governmental currency board of Hong Kong. Under licence from the HKMA, three commercial banks issue their own banknotes for general circulation in the region. Notes are also issued by the HKMA itself.
In the 1860s the Oriental Bank Corporation, the Chartered Bank of India, Australia and China and the Hong Kong and Shanghai Banking Corporation (HSBC) began issuing notes. Denominations issued in the 1860s and 1870s included 1, 5, 10, 25, 50, 100 and 500 dollars. These notes were not accepted by the Treasury for payment of government dues and taxes, although they were accepted for use by merchants. 25-dollar notes did not survive beyond the end of the 19th century, whilst the 1-dollar notes (issued only by the HSBC) were issued until 1935.
20th century
Under the Currency Ordinance of 1935, banknotes in denominations of 5 dollars and above issued by the three authorised local banks (the Mercantile Bank of India, London and China, Chartered Bank of India, Australia and China and the Hongkong and Shanghai Banking Corporation) were all declared legal tender. The government took over production of 1-dollar notes. In 1941, the government introduced notes for 1, 5 and 10 cents due to the difficulty of transporting coins to Hong Kong caused by the Second World War (a shipment of 1941 1-cent coins was sunk, making this unissued coin very rare). Just before the Japanese occupation, an emergency issue of 1-dollar notes was made consisting of overprinted Bank of China 5-yuan notes.
In 1945, paper money production resumed essentially unaltered from before the war, with the government issuing notes of 1, 5 and 10 cents and 1 dollar, and the three banks issuing notes of 5, 10, 50, 100 and 500 dollars. 1-dollar notes were replaced by coins in 1960, with only the 1-cent note issued by the government after 1965.
In 1975, the 5-dollar notes were replaced by a coin, whilst 1,000-dollar notes were introduced in 1977. The Mercantile Bank was absorbed by HSBC in 1978 and ceased issuing notes. In 1985, 20-dollar notes were introduced, whilst, in 1993, a 10-dollar coin was introduced and the banks stopped issuing 10-dollar notes. In 1994, the Hong Kong Monetary Authority (HKMA), gave authority to the Bank of China to issue notes.
The 1-cent note issued by the Government was demonetised and ceased to be legal tender on 1 October 1995.
21st century
Between 1994 and 2002 an attempt was made to replace privately issued HK$10 notes with coins issued by the government. In response to public demand for the continuation of this note, the HKMA issued its own HK$10 notes. HK$10 banknotes are currently the only denomination issued by the HKMA, having acquired the note printing plant at Tai Po from the De La Rue Group of the UK on behalf of the Government. These notes were printed in paper in 2002 and have been printed in polymer since 2007.
The older (green) 10-dollar banknotes previously issued by two commercial banks are still circulating and remain legal tender, although they are being phased out since September 2005. These are popular for lai see and are noticeably scarce in the run up to Chinese New Year.
Leading to the incorporation of Standard Chartered (Hong Kong) on 1 July 2004, the Legislative Council of Hong Kong amended Legal Tender Notes Issue Ordinance. The amendment replaced Standard Chartered Bank with its newly incorporated subsidiary - Standard Chartered Bank (Hong Kong) Ltd - as one of the note-issuing banks in Hong Kong.[1]
Note-issuing banks
Banknotes circulated by four different note issuers
Banknotes circulated by the three different note issuers, 2020[2]
Authorisation is accompanied by a set of terms and conditions agreed on between the Government and the three note-issuing banks. In return for their right to issue notes and to provide backing for these notes, the three banks are legally required to hold non-interest bearing Certificates of Indebtedness (CI) issued by the Exchange Fund.[3]
Banknotes are issued by the three banks, or redeemed, against payment to, or from, the Government Exchange Fund in US dollars, at a specified rate of US$1 to HK$7.80 under the Linked Exchange Rate system.
In April 1996, the HKMA acquired the note printing plant at Tai Po from the De La Rue Group of the United Kingdom on behalf of the Government. The plant has been operating under the name of HKNPL since then. The acquisition of the plant enables the Government, through the HKMA, to be directly involved in the production of Hong Kong currency notes, which is in line with the responsibilities conferred upon the Government under the Legal Tender Notes Issue Ordinance and the Basic Law. In March 1997, the Government sold 15 per cent of its shareholding in HKNPL to the China Banknote Printing and Minting Corporation, a People's Republic of China state-owned enterprise. In October 1997, the Government sold 10 per cent of HKNPL issued shares to each of the three note-issuing banks. The Government continues to exercise management control and maintains a majority stake in HKNPL, with the Chief Executive of the HKMA as the chairman of the company.
In 2007, the bank has acquired polymer banknote technology to print the HK$10 banknote.
Banknotes currently in circulation
The HKMA issues the 10-dollar note and the other three banks issue denominations of 20 (blue), 50 (green), 100 (red), 500 (brown) and 1,000 (gold) dollars.[4]
In September 2009, Standard Chartered Bank issued the world's first 150-dollar denomination banknote, at its 150th anniversary. Approximately 750,000 notes were sold at above face value, in various combinations and presentations, as a commemorative charity issue. Although legal tender, the notes are unlikely to enter circulation, due to their rarity and expected higher re-sale value.[7]
In 2012, Hong Kong's Bank of China issued a new 100-dollar note to commemorate the bank's 100th anniversary. Although legal tender, the notes aren't intended for circulation. 1,100,000 notes were sold as numismatic products packaged in a folder for HK$150. An additional 100,000 were sold as sets of three uncut notes in a folder for HK$600. Finally, 20,000 uncut sheets of 30 notes each were sold for HK$6,000 each. Profits from the sale of the notes were donated to charitable organizations in Hong Kong.[8][9]
In 2015, Hongkong and Shanghai Banking Corporation issued their own 150-dollar banknote to commemorative their 150th anniversary. It came in a single note presented in a folder, a 3-in-1 uncut sheet presented in a folder, and a 35-in-1 uncut sheet.[10][11]
Polymer: The ten-dollar banknotes are made of polymer, and have a transparent panel.
Watermarks: The watermarks are incorporated during the paper manufacturing process. They can be viewed equally well from either side of the note. The images are multi-toned and sharp, and do not show up when placed under ultraviolet light.
Security thread: A straight metal thread is embedded in the note. It can be viewed equally clearly from either side of the note.
See-through features: When the note is held up to the light, the specially designed colour patterns printed on the front and back will be seen to be exactly aligned with each other.
Intaglio printing: The main images of the notes are printed by an intaglio process that deposits a large quantity of ink on the paper, conferring a distinctively embossed feel. The fine lines of these images are clear and sharp.
In pursuance to section 103 of the Crimes Ordinance (Cap 200 of Laws of Hong Kong), anyone who wants to reproduce the whole or any part of any Hong Kong currency note for any purpose in any form must apply in writing to the Monetary Authority for approval. No reproduced images should be submitted with the application because such an action would already amount to a breach of section 103 of the Crimes Ordinance. It is a criminal offence under the Crimes Ordinance to manufacture or knowingly pass, tender or possess a counterfeit banknote. Offenders are liable to imprisonment of up to 14 years.
Hong Kong
Macau
