The Hong Kong Monetary Authority (HKMA) commenced Phase 2 of the e-HKD pilot program and is expanding Project e-HKD to explore new forms of digital money.
The HKMA in Hong Kong revealed on September 23 that it officially began Phase 2 of the e-HKD Pilot Program (Phase 2) to delve deeper “into innovative use cases for new forms of digital money, including e-HKD and tokenized deposits, that can potentially be used by individuals and corporates.”
As Project e-HKD expands its coverage from e-HKD only “to a more comprehensive exploration of the digital money ecosystem, the project has been renamed as Project e-HKD+, reflecting the evolving fintech landscape and the HKMA’s commitment to unlocking the full potential of digital money.”
The e-HKD Pilot Program is an integral “part of Project e-HKD+. Under Phase 2, 11 groups of firms from various sectors have been selected to explore innovative use cases for e-HKD and tokenized deposits across three main themes, namely settlement of tokenized assets, programmability and offline payments.”
The selected firms will also examine the commercial feasibility, “within a real-world setting, of new forms of digital money that may potentially be accessible to individuals and corporates.”
The outcome of Phase 2 will help the HKMA “understand the practical issues that may be faced in designing, implementing and operating a digital money ecosystem that comprises both publicly and privately issued digital moneys.”
Project e-HKD+ will continue to advance the technology and “legal groundwork to support the potential issuance of an e-HKD for the use of individuals and corporates in the future.”
The HKMA will also establish the e-HKD Industry Forum to “provide a collaborative platform for participating institutions to discuss common issues and further explore the possible implementation and adoption of new forms of digital money in a scalable manner.”
Under the Forum, industry-led working groups will “be established to make recommendations on specific topics, with an initial focus on issues related to programmability.”
Similar to Phase 1, an e-HKD sandbox will be “made available to pilot participants to accelerate their prototyping, development and testing of use cases.”
The HKMA will work closely with the selected firms in “the next approximately 12 months in conducting Phase 2, with the aim of sharing the key learnings from Phase 2 with the public by the end of 2025.”
Mr Eddie Yue, Chief Executive of the HKMA, said:
“Project e-HKD+ signifies the HKMA’s commitment to digital money innovation. The e-HKD Pilot Programme has provided a valuable opportunity for the HKMA to explore with the industry how new forms of digital money can add unique value to the general public. The HKMA will continue to adopt a use-case driven approach in its exploration of digital money. We look forward to working closely with industry participants in Phase 2 to co-create various innovative use cases.”
