Hong Kong Launches CBDC Program
In a substantial step forward for the worldwide implementation of central bank digital currencies (CBDCs), the Hong Kong Monetary Authority (HKMA) unveiled its pilot program for the electronic Hong Kong dollar (e-HKD) on Thursday, explaining the digital currency's numerous possible applications in payments and tokenized deposits.
Several significant players from the finance, tech, and payment sectors will be involved in the e-HKD pilot program as operational partners. These include the state-owned Bank of China, China Construction Bank, Industrial and Commercial Bank of China, along with global banks HSBC and Standard Chartered.
HKMA's Chief Executive, Eddie Yue, remarked on Thursday that while the authority hasn't decided whether or when to roll out e-HKD, initiating the pilot program is an exciting development. He believes that partnering with key industry players for this pilot could enhance their preparedness for a potential e-HKD launch.
Alipay, Ant Group's widely used payment app in China, will also test programmable payment scenarios with e-HKD via its Hong Kong branch. Other participants include Visa, Mastercard, and Ripple Labs.
The e-HKD pilot will investigate its applications across six areas: comprehensive payments, programmable payments, offline payments, tokenized deposits, settlement of Web3 transactions, and settlement of tokenized assets.
This initiative follows the HKMA's release of a whitepaper in October, examining the feasibility of a retail CBDC. Meanwhile, the People's Bank of China on the mainland has been actively testing its own CBDC, the e-CNY, considered to be the world's most advanced.
Additionally, the HKMA announced plans to establish a "CBDC Expert Group" of academics and industry experts to tackle policy and technical issues such as cybersecurity, privacy protection, and interoperability.
Stanley Chao, Managing Director of U.S.-based strategy firm All In Consulting, noted via email that piloting a CBDC could position Hong Kong as a market leader, reaping numerous benefits. Chao acknowledged the challenges of transitioning to a CBDC for consumers, retailers, and banks, stating that solving these issues first could provide substantial advantages and propel Hong Kong far ahead of countries still considering CBDCs.
HKMA's Chief Executive, Eddie Yue, remarked on Thursday that while the authority hasn't decided whether or when to roll out e-HKD, initiating the pilot program is an exciting development. He believes that partnering with key industry players for this pilot could enhance their preparedness for a potential e-HKD launch.
Alipay, Ant Group's widely used payment app in China, will also test programmable payment scenarios with e-HKD via its Hong Kong branch. Other participants include Visa, Mastercard, and Ripple Labs.
The e-HKD pilot will investigate its applications across six areas: comprehensive payments, programmable payments, offline payments, tokenized deposits, settlement of Web3 transactions, and settlement of tokenized assets.
This initiative follows the HKMA's release of a whitepaper in October, examining the feasibility of a retail CBDC. Meanwhile, the People's Bank of China on the mainland has been actively testing its own CBDC, the e-CNY, considered to be the world's most advanced.
Additionally, the HKMA announced plans to establish a "CBDC Expert Group" of academics and industry experts to tackle policy and technical issues such as cybersecurity, privacy protection, and interoperability.
Stanley Chao, Managing Director of U.S.-based strategy firm All In Consulting, noted via email that piloting a CBDC could position Hong Kong as a market leader, reaping numerous benefits. Chao acknowledged the challenges of transitioning to a CBDC for consumers, retailers, and banks, stating that solving these issues first could provide substantial advantages and propel Hong Kong far ahead of countries still considering CBDCs.
