Hong Kong Monetary Authority Released White Paper On Its Retail CBDC
The Hong Kong Monetary Authority (HKMA) reveiled a technical whitepaper on its future retail CBDC, aiming to explore the specifics of a the e-HKD.
In collaboration with the BIS Innovation Hub, the Hong Kong Monetary Authority (HKMA) has released a technical Whitepaper on retail CBDC, called “e-HKD: A technical perspective.” The regulator expects to come up with an initial view of the project by the middle of 2022.
Hong Kong And CBDC
The HKMA ramped up its efforts of launching a digital Hong Kong dollar (e-HKD). After exploring the project’s potential benefits with peer central banks, the monetary organization brought to light its official whitepaper on its future retail CBDC.
The HKMA announced the “Fintech 2025” strategy in June this year, one strategic direction under which is to strengthen research work on CBDC with a view to future-proofing Hong Kong in terms of CBDC readiness.
Apart from the continued and expanded collaborative effort with peer central banks on cross-border application of wholesale CBDC, the HKMA has started a study on the prospect of issuing retail CBDC in Hong Kong, i.e. e-HKD, covering both technical and policy considerations, and aims to come up with an initial view by the middle of next year.
The HKMA’s partner in investigating the move was the Hong Kong Centre of the BIS Innovation Hub. Together, their mission was to analyze the details for issuing and distributing retail central bank digital currencies.
The Whitepaper is different than other similar papers as it reveals the technical architecture of the financial solution. Per the announcement, locals can expect the initial view of e-HKD by the summer of 2022.
Mr. Eddie Yue, the Chief Executive of the HKMA commented:
“The Whitepaper marks the first step of our technical exploration for the e-HKD. The knowledge gained from this research, together with the experience we acquired from other CBDC projects, would help inform further consideration and deliberation on the technical design of the e-HKD. We also look forward to receiving feedback and suggestions from the academia and industry to enrich our perspectives.”
Hong Kong And Thailand with a Joint CBDC Project
Last year the central banks of the two nations revealed their intention to create a joint CBDC, dubbed Project Inthanon-LionRock, to facilitate efficient payments between each other.
Back then, the HKMA informed that the current payment system in Hong Kong was highly efficient. As such, it didn’t need to adopt a CBDC for settlements within the country. However, the authority believed cross-border payments need improvement, and digital currency could help solve the problem.
The central banks did not give a timeframe for launching their upcoming CBDC for real transactions. However, they vowed to continue working on the joint project and even add more countries to the Project Inthanon-LionRock.
