Hong Kong Monetary Authority concluded that e-HKD has the potential to make payments more effective in a future digital economy
The Hong Kong Monetary Authority (HKMA) has committed to launching a retail central bank digital currency (CBDC) after the scrutiny of the technical and policy perspectives brought positive results.
In the framework of its ‘Fintech 2025’ strategy, the HKMA has examined the prospects of issuing an e-HKD. The regulator held two rounds of market consultation, one on high-level technical design and one on key policy and design issues.
Overall, respondents supported the initiative, expressing the belief that e-HKD has the potential to make payments more effective. However, they also pointed out the need to further examine pressing CBDC issues such as privacy protection, legal considerations, and use cases.
Therefore, the HKMA has outlined a three-rail approach for the possible implementation of e-HKD in the future. The first two rails will lay the technical and legal foundations, and explore use cases as well as application, implementation, and design issues. Furthermore, HKMA will also conduct a series of pilots in close collaboration with various stakeholders to gain actual experience.
Meanwhile, the third rail will set the timeline for launching e-HKD, consolidating the outcomes of the earlier preparatory work.