HKMA’s e-Hong Kong dollar Pilot programme Begins May 18

Hong Kong Monetary Authority (HKMA) Moves Closer to Introducing Digital HKD

On May 18, the Hong Kong Monetary Authority (HKMA) made a public statement regarding the initiation of the e-HKD Pilot Programme.

The pilot programme aims to thoroughly explore the potential use cases of six different categories, which include full payments, programmable payments, offline payments, tokenized deposits, settlement of Web3 transactions, and settlement of tokenized assets.

The HKMA’s goal is to carry out a series of pilot programmes that will investigate the use cases, implementation, and design issues related to potential implementation of the e-HKD. So far, in this first pilot programme, the HKMA has selected a group of 16 firms to participate.

Under the HKMA's three-rail approach to pave the way for the potential implementation of a retail central bank digital currency (CBDC), namely e-HKD, the e-HKD Pilot Programme serves as a crucial component of Rail 2.

The HKMA intends to establish a CBDC Expert Group with the aim of promoting collaboration between the government, industry, and academia on CBDC research.

This group will consist of prominent academics from local universities who will provide valuable insights to support Hong Kong's future exploration of crucial policy and technical issues related to CBDC;, including privacy protection, cybersecurity, and interoperability.

Chief Executive of the HKMA Mr Eddie Yue, the ]Chief Executive of the HKMA, said, “We are excited to kick-start the e-HKD Pilot Programme, which serves as a tremendous opportunity for the HKMA to collaborate with the industry in exploring innovative use cases and maximising our readiness for a potential e-HKD.”

The HKMA has not reached a definite conclusion regarding the introduction of e-HKD at this point in time.

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