Hong Kong’s central bank, the HKMA, has started testing e-HKD, a digital version of the Hong Kong dollar. The pilot program will explore different uses for the digital currency, including retail transactions. This is a step towards potentially introducing a digital currency that can be used by the public.
Hong Kong’s e-HKD pilot program has officially started.
The Hong Kong Monetary Authority (HKMA) has started the e-HKD Pilot Programme. The program involves 16 companies from the financial, payment, and technology sectors. They will participate in the first round of pilot projects for the digital Hong Kong dollar (e-HKD) in 2023. The HKMA aims to explore and test the potential uses of the digital currency with these selected firms.
“During the e-HKD Pilot Programme, there will be in-depth exploration of potential uses in six categories. These categories include various payment methods like regular payments, programmable payments, and offline payments. Additionally, the pilot program will also focus on tokenized deposits, settling Web3 transactions, and settling assets in tokenized form. The aim is to understand the practical applications and benefits of e-HKD in each of these areas”.
The HKMA will work closely with different groups to conduct a series of pilots and study the use cases, implementation, and design aspects of e-HKD. They aim to gather valuable insights and knowledge from these pilots, which will be shared with the public during Hong Kong Fintech Week 2023 in November. This way, everyone can learn more about the progress and findings of the e-HKD initiative.
Several companies have joined the pilot program, including Alipay Financial Services, Bank of China, China Construction Bank, Fubon Bank, Ripple Labs, Standard Chartered Bank, Hang Seng Bank, HSBC, Visa, Industrial and Commercial Bank of China, Mastercard Asia/Pacific, and Boston Consulting Group. These companies will be actively involved in testing and exploring the e-HKD initiative alongside the HKMA.
Eddie Yue, the Chief Executive of HKMA, expressed his thoughts on the matter, saying, “Although the HKMA has not made a final decision on introducing e-HKD or determining its timeline, we are thrilled to begin the e-HKD Pilot Programme. This initiative allows us to work closely with the industry to explore creative use cases and enhance our preparedness for a possible e-HKD in the future.”
In September of last year, the Hong Kong Monetary Authority shared its position on e-HKD as a part of its “Fintech 2025” strategy. They conducted two rounds of discussions with the market, one focusing on technical aspects and another addressing important policy and design matters. They received feedback from 75 stakeholders during this consultation period.
The HKMA previously outlined a three-step plan for implementing e-HKD. In the first step, they establish the necessary technology and legal framework. The second step involves exploring different ways e-HKD can be used and conducting pilot programs. Finally, in the third step, they focus on actually launching e-HKD based on the findings and outcomes of the previous stages.
The e-HKD Pilot Programme is an important part of the HKMA’s second step in their approach to introducing a retail central bank digital currency (CBDC) called e-HKD. This pilot program helps pave the way for potential future implementation of e-HKD and explores its feasibility.
This information is for general knowledge only and should not be considered as advice for investing or making financial decisions.