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Hong Kong advances CBDC pilot, bringing e-HKD trials to Section 2

31 Oct 2023
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The Hong Kong Financial Authority (HKMA) is gearing up for the second part of the e-HKD (e-Hong Kong greenback) pilot program because it introduced the profitable completion of the Section 1 trial of its in-house central bank digital currency (CBDC). 

The HKMA launched the e-HKD pilot program in November 2022 to judge the business viability of an in-house CBDC as part of its “Fintech 2025” strategy. Section 1 was devoted to finding out e-HKD in six areas, which embody full-fledged funds, programmable funds, offline funds, tokenized deposits, settlement of Web3 transactions and settlement of tokenized property.

Abstract of pilots by class and individuals. Supply: hkma.gov.hk

Detailing the findings of the e-HKD phase 1 trial, the HKMA report highlighted programmability, tokenization and atomic settlement as three key areas the place Hong Kong’s CBDC may gain advantage shoppers and companies.

e-HKD specimens issued by three note-issuing banks. Supply: hkma.gov.hk

The report learn:

“The subsequent part of the e-HKD pilot program will construct on the success of Section 1 and contemplate exploring new use instances for an e-HKD.”

HKMA plans to “delve deeper” into some use instances that confirmed promising CBDC purposes within the part 1 trial. Technical concerns present an inclination towards utilizing distributed ledger know-how (DLT)-based design contemplating its interoperability and scalability capabilities.

Three-rail strategy for the potential implementation of an e-KHD. Supply: hkma.gov.hk

As proven above, Hong Kong’s CBDC program consists of a three-rail strategy — basis layer growth, trade pilots and iterative enhancements and full launch. Presently, at its second rail, the e-HKD program trial is supported by private and non-private organizations to make sure business viability for each events.

HKMA mentioned it is going to additionally proceed to work on rail 1 initiatives reminiscent of laying the authorized and technical foundations for e-HKD.

Associated: Hong Kong lawmaker wants to turn CBDC into stablecoin featuring DeFi

Alongside localized efforts for CBDCs, quite a few central and business banks joined arms beneath Undertaking mBrigde to discover options for sooner, cheaper, extra clear cross-border funds.

On Sept. 25, HKMA CEO Eddie Yue revealed that mBridge will develop and be commercialized because it welcomed new banking members from China, Hong Kong, Thailand and the UAE.

“We expect to welcome extra fellow central banks to hitch this open platform. And really quickly, we’ll launch what we name a minimal viable product, with the goal of paving the best way for the gradual commercialization of mBridge,” Yue added.

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