May 29, 2024
By Anjali Kochhar
Hong Kong is preparing to trial its retail digital currency, e-HKD, in the mortgage sector. The Hong Kong Monetary Authority (HKMA) plans to pilot e-HKD with select participants to enhance the pricing and distribution of mortgages, according to media reports. This trial aims to streamline mortgage processes, potentially allowing Hong Kong residents to borrow from multiple lenders at preferential rates with faster approval and disbursement.
However, it remains unclear if a new regulatory body will be established to oversee mortgage and lending practices involving e-HKD. Several financial institutions, including Boston Consulting Group (BCG) and ZA Bank, have expressed interest in this initiative during their initial pilot programs. BCG estimates suggest that the use of e-HKD could extend to tokenized assets, potentially digitizing assets valued at approximately $4.6 trillion, mainly residential properties. This move is seen as a significant step towards modernizing Hong Kong’s financial infrastructure and improving the efficiency of the mortgage market.
The pilot acceleration aligns with China’s recent launch of its first pilot outside the mainland, introducing the digital yuan, or e-CNY, in Hong Kong. The digital yuan is currently being tested for cross-boundary payments, enabling Hong Kong residents to top up digital wallets with up to 10,000 CNY (approximately $1,385) through 17 retail banks in Hong Kong, including Standard Chartered Bank, ZA Bank, and DBS Bank.
The region’s dedication to embracing digital currencies and investigating their possibilities across a range of financial sectors is demonstrated by the simultaneous advancement of e-HKD and e-CNY. The positive outcomes of these trials may open the door for digital currencies to be more widely accepted in Hong Kong, which might revolutionize the financial sector and provide citizens with more convenient and effective financial services.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
