Alibaba is reportedly eyeing the possibility of creating a Hong Kong version of its widely used Chinese money market fund.

The financial unit of Alipay is currently taking into consideration the feasibility of providing a Hong Kong version of Yu'E Bao, a money market fund that pays greater values on renminbi deposits compared with other conventional accounts.

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To date, the officials of the company are reportedly discussing this offer with the Hong Kong Monetary Authority to acquire an authorization to go ahead with the project, as reported by the Financial Times.

This decision is allegedly one of Alibaba's ventures to expand the business beyond the borders of China, presumably gaining confidence from its record breaking initial public offering in New York that amounted to US$25 billion.

Should Alibaba obtain the go signal from Hong Kong and China, the funds for the new version of Yu'E Bao would reportedly be invested in the latter so as to attain higher profits or returns.

In addition, Alibaba claims that if the newly proposed project takes off, then they could possibly offer 4 percent returns. This percentage is greater compared with the current 1 percent Alibaba offers.

"We are hoping to introduce it by early next year," stated Ming Shu, who is recognized as main proponent of Alipay's micro and SME finance scheme. "And if we can send the money back to China, we can make a big difference. We are pushing hard," he added.

Alipay, which is identified as the largest provider of online payments in China, needs a banking license to be able to make these plans come into fruition.

"They would have to become a licensed bank and there is a very strict licensing regime in Hong Kong," said one senior HKMA staffer.

TagsHong Kong, Yu'e Bao, Hong Kong Monetary Authority