The Hong Kong Monetary Authority (HKMA) has announced the initiation of the e-HKD Pilot Programme, a significant step towards the potential implementation of a retail central bank digital currency (CBDC) known as e-HKD.
The program involves the participation of 16 firms from the financial, payment, and technology sectors, selected for the first round of pilots in 2023. These pilots will delve into six categories, including full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions, and settlement of tokenised assets.
The e-HKD Pilot Programme forms a crucial part of Rail 2, one of HKMA’s three-rail approach, aimed at exploring the feasibility of a retail CBDC. The program will involve close collaboration with various stakeholders to examine use cases, implementation, and design aspects of e-HKD.
Each pilot will contribute valuable insights, enriching HKMA’s perspective and refining its approach towards the possible implementation of e-HKD. However, it is important to note that the HKMA has not yet reached a definitive decision on introducing e-HKD.
Senior executives from the selected firms attended the commencement event, where they presented the key highlights of their proposed use cases. Over the next few months, the HKMA will closely engage with these firms to conduct the pilots and monitor progress.
Although the outcomes of the pilots may evolve, the HKMA intends to share the key learnings with the public at Hong Kong FinTech Week 2023. Furthermore, the HKMA plans to conduct additional rounds of pilots with the industry in the future.
In addition to the pilot program, the HKMA is establishing a CBDC Expert Group to facilitate collaboration between the government, industry, and academia in CBDC research. The group will consist of leading academics from local universities who will contribute valuable insights on key policy and technical issues related to CBDC, such as privacy protection, cybersecurity, and interoperability.
Mr. Eddie Yue, Chief Executive of the HKMA, expressed enthusiasm for the e-HKD Pilot Programme and its potential to foster collaboration with the industry in exploring innovative use cases. While the decision to introduce e-HKD has yet to be made, the HKMA aims to maximize its preparedness through this program.
Mr. Yue also highlighted the importance of academia’s expertise, stating that government-industry-academia collaboration in CBDC research will ensure the relevance of their efforts and enable the translation of outcomes into viable business opportunities.
As the e-HKD Pilot Programme progresses, the financial industry and the public will eagerly await the results and the potential implications for the future of digital currency in Hong Kong.
Read more:
- Chinese State-Owned Enterprise Greenland Holdings Plans To Trade Virtual Assets In Hong Kong
- Ripple Introduces CBDC Platform To Drive Financial Inclusion And Efficiency