The Hong Kong Monetary Authority (HKMA) announced its intention to create a retail central bank digital currency (CBDC), as stated in a report released on Friday (June 9)
The HKMA has been studying the development of an electronic Hong Kong dollar, referred to as ‘e-HKD,’ since 2017.
Following a recent study and feedback gathered from two rounds of market consultation, the Hong Kong Monetary Authority (HKMA) has been persuaded to commence groundwork for the potential future implementation of a retail digital currency.
The report outlines the Hong Kong Monetary Authority’s (HKMA) plans to explore the implementation and practical applications of a retail central bank digital currency (CBDC). As part of these efforts, the HKMA will begin activities to establish the required foundations, conduct studies, and initiate pilot programs.
The HKMA’s decision is in line with a global trend where central banks worldwide are actively exploring various design options and potential use cases for digital versions of their sovereign currencies. This reflects the growing interest and efforts among central banks to embrace the possibilities offered by digital currencies.
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The report highlights the Bank for International Settlements’ emphasis on the significance of investigating the digitization of financial systems as a means to uphold stability in the ever-evolving landscape. This underlines the importance of exploring digital transformations within the financial sector to ensure resilience and adaptability.
According to a portal, the HKMA’s report stated that while the e-HKD may not have an immediate role in the present retail payment market, potential use cases for the digital currency could swiftly emerge as the digital economy undergoes rapid evolution or even revolution. This suggests that the digital economy’s dynamic nature could lead to new opportunities for the e-HKD in the future.
In its Friday’s report, the HKMA mentioned that while the study proposed exploring blockchain solutions for the e-HKD, the regulator will carefully consider various factors such as policy objectives, actions taken by other jurisdictions, and explore technically feasible solutions. This indicates a comprehensive approach towards evaluating and determining the most suitable path for the implementation of the e-HKD.
Also Read: Hong Kong Launches Digital Currency Pilot with Major Firms HSBC, Bank of China, Alipay
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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