March 18, 2024
By Sharan Kaur Phillora
Hong Kong’s Monetary Authority (HKMA) has launched Phase 2 of its e-HKD pilot program, aiming to delve deeper into the potential applications of a digital Hong Kong dollar (e-HKD) within the region.
Here’s what we know:
This second phase will focus on exploring the unique values of e-HKD in areas such as programmability, tokenization, and atomic settlement, as well as investigating new use cases not covered in the initial phase.
The initiative is supported by an enhanced e-HKD sandbox environment built upon the wholesale central bank digital currency (wCBDC) sandbox under Project Ensemble. This environment will facilitate participants’ development, prototyping, and testing of use cases and study the interoperability and interbank settlement between e-HKD and other forms of tokenized money.
The HKMA’s ongoing research aims to understand how Central Bank Digital Currencies (CBDCs) would function within a future digital money landscape despite the uncertainty surrounding the official adoption of a CBDC. The outcomes and insights gained from both phases of the e-HKD Pilot Programme, alongside research conducted by the CBDC Expert Group, will aid the HKMA’s study on the possible implementation of an e-HKD.
Organizations interested in participating in Phase 2 of the e-HKD Pilot Programme are invited to submit their applications by May 17, 2024, with further details available on the HKMA website.
This development underscores Hong Kong’s commitment to digital finance innovation and its efforts to prepare for the potential issuance of digital currencies at wholesale and retail levels. It also highlights the region’s dedication to enhancing its role in the international monetary and financial system, particularly in an increasingly digital global economy.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
