The Hong Kong Monetary Authority (HKMA) has officially unveiled the second phase of its pilot program for the central bank digital currency (CBDC), referred to as e-HKD, as announced in a statement on September 23.
This new phase aims to explore advanced applications of digital currency, particularly focusing on e-HKD and tokenized deposits for both individuals and businesses. The initial phase primarily tested CBDC functionalities in areas like domestic retail payments, offline transactions, and the settlement of tokenized assets.
The initiative has progressed from its original concept of e-HKD and has now been rebranded as Project e-HKD+ to better reflect the evolving fintech landscape.
Exploring e-HKD Applications
The HKMA has partnered with 11 diverse firms to investigate e-HKD applications across three key domains:
- Tokenized asset settlement
- Programmability
- Offline payment solutions
Notable participants in this second phase include:
- ANZ
- Airstar Bank
- Aptos Labs
- BlackRock
- Bank of Communications (Hong Kong)
- ChinaAMC
- China Mobile
- DBS
- Fidelity International
- Kasikornbank
- Sanfield
Through this collaboration, these firms will assess the commercial potential of new digital currencies in practical environments, aiming to enhance accessibility for both consumers and businesses.
Insights and Future Direction
The outcomes from Phase 2 will shed light on the practical challenges of establishing a cohesive digital currency ecosystem, integrating both publicly issued and private digital currencies. Project e-HKD+ will further develop the essential technology and legal structures needed for potentially issuing e-HKD to individuals and corporations in the future.
Establishing Collaborative Frameworks
To promote teamwork, the HKMA plans to create the e-HKD Industry Forum. This platform will enable participating institutions to engage in discussions about shared challenges and explore methods for scaling new forms of digital currency. Industry-led working groups will initially focus on programmability aspects.
As in the first phase, participants will have access to an e-HKD sandbox, designed to facilitate the prototyping, development, and testing of various use cases. Over the next year, the HKMA will closely collaborate with the selected firms, with the aim of sharing significant findings with the public by the end of next year.
“Project e-HKD+ represents the HKMA’s dedication to innovating in digital currency. The e-HKD Pilot Programme has provided a pivotal opportunity for the HKMA to collaborate with the industry to explore how new types of digital money can deliver unique benefits to the public. The HKMA will maintain a use-case driven strategy in its ongoing exploration of digital currency.”
Tags: e-HKD, HKMA, CBDC, Digital Currency, Fintech
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