In a speech delivered today, Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), announced the pilot program launch of e-HKD or the Hong Kong central bank digital currency (CBDC).
According to Yue, 16 companies have been selected to participate in the first batch of the pilot program.
The pilot will include six categories including programmable payments, offline payments and “other new developments with the use of blockchain technology, such as settling Web3 transactions and tokenized assets.”
The outcome of the pilot will be shared at Hong Kong Fintech Week in November.
Hong Kong has been researching a CBDC or e-HKD since 2017. The HKMA has also been reviewing the possibility of issuing a retail CBDC.
Yue stated:
“[The e-HKD] implementation would entail far-reaching implications on a wide range of issues relating to areas such as legal, regulatory, policy, financial stability, privacy, cybersecurity, and interaction with existing payment methods. We also understand that e-HKD would be a critical and complex financial infrastructure project that may take years to complete. Therefore, we announced in September last year that we would adopt a three-rail approach to pave the way for possible implementation of e-HKD:
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- Rail 1 aims to lay the technology and legal foundations for supporting the implementation of e-HKD.
- Rail 2 focuses on application research and pilots, and it runs in parallel with Rail 1.
- Rail 3 is concerned about launching e-HKD, which will depend on the actual progress made under Rail 1 and Rail 2, as well as the pace of relevant market development.”