Hong Kong announces CBDC pilot programme; several top banks to participate
Hong Kong joins the bandwagon of countries like India and Japan to pursue advanced research on CBDCs.
Highlights
- Hong Kong launches its CBDC pilot programme for the e-HKD
- 16 banks and payment firms will collaborate across various use cases
- HKMA aims to disclose the key learnings at Hong Kong FinTech Week 2023
As the usage of Central bank digital currencies (CBDCs) has gained momentum, around 100 countries across the world are exploring CBDCs at one level or another.
In fact, they have emerged as a potential game changer in the world of finance. The latest nation to join the bandwagon is Hong Kong.
The HKMA, i.e., the Hong Kong Monetary Authority (HKMA) has unveiled the commencement of its CBDC pilot programme for the e-HKD. Hong Kong’s financial authorities will work in tandem with industry leaders to explore the potential use cases of its CBDC in six categories- full-fledged payments, offline payments, programmable payments, tokenised deposits, settlement of tokenised assets as well as Web3 transactions.
Who are participating in the pilot run?
In the coming months, 16 banks and payment firms will collaborate across various use cases. These include the Bank of China, Industrial and Commercial Bank of China, Fubon Bank, HSBC, China Construction Bank, and Standard Chartered Bank. Other participants include Ripple Labs, Visa, and Mastercard.
It must be noted that this announcement followed the release of a whitepaper in October last year, by Hong Kong’s de facto central bank, HKMA, for exploring the feasibility of a retail CBDC. Further, the national bank has revealed forming a “CBDC Expert Group” comprising scholars and industry experts who will advise on policy and technical issues like cybersecurity, privacy protection, and interoperability.
The HKMA aims to disclose the key learnings at Hong Kong FinTech Week 2023 in November and may conduct more rounds of pilots with the industry in the future.
Know India's CBDC trail run
India’s central bank, the Reserve Bank of India had issued a concept note on CBDCs in October 2022. It had launched the pilot in wholesale segment, known as the Digital Rupee –Wholesale in November, and in December 2022, launched the pilot in retail segment, known as digital Rupee-Retail, within a closed user group comprising participating customers and merchants.
Interestingly, as per reports, government securities amounting to ₹275 crore were traded using CBDCs on the first day of the pilot project in the wholesale segment.
Several nations across the globe have shown keen interest in CBDCs. China, Japan, Mexico. etc. are pursuing advanced research and evaluating their CBDCs use cases.
