CRYPTO

Hong Kong is exploring CBDC as part of its fintech strategy

The Hong Kong Monetary Authority (HKMA) today released an official white paper to explore the potential of a retail-centric central bank digital currency (CBDC), the digital Hong Kong dollar (E-HKD).

According to the document, HKMA will try to understand “potential architectural and design options” from a technical and regulatory policy perspective, with the ambition of creating a dual-level system প্রথম the first was designed to issue central banks and redeem CBDC, and the second ” Retail-centric for commercial banks to distribute and promote RCBDC or CBDC-supported e-money. “

Hong Kong began their investigation through Project Lionrock at CBDC in 2017 and began a seven-month partnership with the Bank of Thailand in early 2020 on “the possibility of wholesale CBDC to pay at the border”.

The initiative soon became a multi-CBDC bridge in February 2021 after the launch of the Digital Currency Institute of the United Arab Emirates Central Bank and the People’s Bank of China. The goal of this “M-CDBC” will be to use distributed laser technology to provide a proof-of-concept model for an integrated payment network.

In June of this year, HKMA announced Fintech 2025, a financial technology initiative focusing on five areas of innovation, including helping central banks adopt a CBDC, building a skilled workforce and launching it today. HKMA CEO Eddie U says:

“The White Paper marks the first step in our technological exploration for E-HKD. The knowledge gained from this study, along with the experience gained from other CBDC projects, will help to inform further consideration and discussion about the technical design of e-HKD.

Related: CBDCs could halve remittance costs at border: BIS report

“We look forward to receiving feedback and suggestions from academia and industry to enrich our vision,” Yu added.

Despite the ban on all crypto-related activities in Hong Kong as well, the People’s Republic of China has consistently been ambitious in pursuit of a CBDC, which has established itself as a prominent leader in the growing global market.