- The Hong Kong Monetary Authority has announced the commencement of its e-HKD pilot program.
- The program is part of a broader plan by the HKMA to explore the implementation of a retail CBDC.
- The pilot program will see participation from 16 firms including Ripple Labs and Mastercard.
The Hong Kong Monetary Authority (HKMA) has kickstarted its e-HKD pilot program, paving the way for the potential implementation of a retail central bank digital currency (CBDC) in Hong Kong. The pilot program is part of a broader plan by the city-state to explore the use cases of a retail CBDC for the settlement of tokenized assets, offline payments, and programmable payments among several other uses.
According to a press release by the HKMA, Hong Kong’s central banking institution’s latest pilot program will see participation from 16 firms from the financial, payment, and technology sectors. As per the list, the firms include leading blockchain firm Ripple Labs, Standard Chartered, and top payment solution providers Visa and Mastercard.
The e-HKD pilot program is a key part of Rail 2 under the Hong Kong Monetary Authority’s three-rail approach which laid out the roadmap and timeline for a potential retail CBDC in the city-state. As per Rail 2, the HKMA will take deep dives into use cases as well as application, implementation, and design issues relating to e-HKD.
This stage also includes a series of pilots in collaboration with industry stakeholders in order to gauge feasibility and gain actual experience. Rail 2 will run parallel to Rail 1, which aims to lay the technology and legal foundations to support the implementation of e-HKD. Rail 1 also involves the preparation of legislative amendments in order to make CBDC a legal tender in Hong Kong.
Eddie Yue, the chief executive of HKMA, stated that the pilot program will help Hong Kong maintain its status as a global financial hub. “We welcome the positive feedback received and agree with the respondents on the need to take a deep dive into issues such as privacy protection and use cases,” he added.
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