This week, the Hong Kong Monetary Authority (HKMA) officially announced the commencement of the pilot programme of its e-HKD CBDC
Hong Kong has not yet decided a timeline for the rollout of the e-HKD CBDC commercially.
The introduction of central bank digital currency (CBDC) by central banks in different parts of the world has emerged among the top banking tweaks to be recorded as major banking innovations. Hong Kong has now become the latest nation to join the list of countries like India, China, Japan, and Nigeria among others that are conducting advanced studies and trials of their respective CBDCs. The e-HKD CBDC of Hong Kong is being launched into its pilot phase this week so that its use cases could be accessed and tested thoroughly before its commercial roll out.
Created on blockchains, CBDCs are the digital representations of fiat currencies that eliminate the need for paper-based physical notes while also recording the details of all transactions in an unchangeable format on the blockchain.
This week, the Hong Kong Monetary Authority (HKMA) officially announced the commencement of the pilot programme of the e-HKD CBDC.
In the coming months, the financial authorities of Hong Kong will work with industry leaders to explore the potential use cases of its CBDC broadly in six categories — full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions as well as settlement of tokenised assets.
“Through this iterative process, the outcomes and insights gained from each pilot would help enrich the HKMA’s perspective and refine the HKMA’s approach to the possible implementation of e-HKD. The HKMA is not yet at a point where a firm decision can be made to introduce e-HKD,” said an official blog post by the HKMA.
A total of sixteen entities from the sectors of finance, technology, and payment processing have been onboarded by Hong Kong to participate in its CBDC trials.
The leaders of these sixteen organisations were present at the event where the HKMA announced the launch of the e-HKD and they all revealed their plans to test the CBDC as part of its trial process.
“We are excited to kick-start the e-HKD Pilot Programme. By fostering government-industry-academia collaboration in CBDC research, we aim to ensure the relevance of our research and development efforts, and enable the translation of such outcomes into viable business opportunities,” Eddie Yue, the Chief Executive of the HKMA, said in the blog post.
In the months to come, the HKMA is looking to increase the participation of the government in the CBDC trials. A CBDC Expert Group will also be established by the HKMA, comprising of academicians and researchers from local universities.
Hong Kong has left it to the banks to discuss and decide if they wish to keep the e-HKD either centralised — under their control, or decentralised — where the CBDC would be distributed away from a central, authoritative location in small fractions.
Unlike the UK and the US, that have taken a rather democratic approach and invited suggestions on CBDCs from their nationals, Hong Kong wishes to keep the process more in the hands of the authorities.
Given the growing interest in crypto among its citizens, the country has also amended its Anti-Money Laundering (AML) and Counter-Terrorist Financing (Amendment) Bill 2022, to now include crypto transactions as well.
Source:gadget360.com