The Hong Kong Monetary Authority has revealed plans to start the trial of its central bank digital currency in the last quarter of 2022. Its CBDC will be known as e-HKD. The CBDC could be used in the future for various daily routine activities and transactions. Hong Kong aims to make digital currency available to the public, and enhance its monetary system.
Furthermore, Hong Kong will observe several law modifications and digital infrastructure to support the pilot launch of e-HKD. The HKMA believes that several central banks around the globe are pursuing their CBDC projects. Therefore, it is high time to work on the effective launch of e-HKD. Hong Kong’s e-HKD will be catching up with several other CBDCs.
Hong Kong Will Conduct a Series of Trials for its CBDC
Previously, HKMA came up with a discussion paper about the key issues of CBDCs. The authority was seeking views on this discussion paper and received 75 responses on it. Several fintech companies, industry experts, and tech institutions took a part to review the paper. While commenting on the responses, the HKMA said,
“Overall, the respondents are supportive of the e-HKD initiative and believe that e-HKD has the potential to make payments more effective while supporting the digital economy. At the same time, the respondents also pointed out the need to further examine issues such as privacy protection, legal considerations, and use cases.”
Moreover, the pilot run of e-HKD will ensure the participation of several banks, payment companies, and other tech firms. It is aimed at analyzing the use of digital currency between staff members and clients. Hong Kong believes that the issuance of e-HKD will not impact its existing coins or three note-issuing banks. However, e-HKD will offer more choices for the users.
At the start of the fourth quarter, the HKMA will implement the needed infrastructure for the CBDC project. But at the same time, the authority will conduct more research and initiate further trials to have more experience. After this, e-HKD will be ready for launch.
The issuance of e-HKD is part of Hong Kong’s Fintech 2025 plan. The plan revealed in 2022 revolves around developing financial technologies in the next three years. Since then, the HKMA is working towards the development and implementation of the digital coin. China has been working tirelessly on its Digital Yuan project. Therefore, Hong Kong believes e-HKD is critical to match global technological and e-commerce growth.