On Monday, the Hong Kong Financial Authority (HKMA) released an official white paper exploring the potential of a retail-focused central financial institution digital foreign money (CBDC), the digital Hong Kong greenback (e-HKD).
In response to the doc, the HKMA will search to grasp the “potential architectures and design choices” from a technical and regulatory coverage perspective, with the ambition of making a dual-tier system — the primary being designed for a “central financial institution to situation and redeem CBDC,” and the second being retail-centric for “business banks to distribute and flow into both rCBDC or CBDC-backed e-money.”
Hong Kong debuted its investigation into CBDCs in 2017 with Mission LionRock, and in early 2020, it launched into a seven-month collaboration with the Bank of Thailand, prospecting the “potential of wholesale CBDC for cross-border funds.”
The initiative quickly evolved into Multiple CBDC Bridge in February 2021 following the introduction of the Central Financial institution of the United Arab Emirates and the Digital Forex Institute of the Individuals’s Financial institution of China. This “m-CDBC” will purpose to make use of distributed ledger know-how to ship a proof-of-concept mannequin for a unified funds community.
In June of this yr, the HKMA announced Fintech 2025, a monetary know-how initiative targeted on 5 areas of innovation, together with providing help to central banks within the adoption of a CBDC, creating a talented workforce, in addition to the initiative launched at the moment. HKMA chief govt Eddie Yue mentioned:
“The Whitepaper marks step one of our technical exploration for the e-HKD. The data gained from this analysis, along with the expertise we acquired from different CBDC initiatives, would assist inform additional consideration and deliberation on the technical design of the e-HKD.”
“We additionally stay up for receiving suggestions and solutions from the academia and trade to counterpoint our views,” Yue added.
Regardless of issuing a blanket ban on all crypto-related activities alongside Hong Kong, the Individuals’s Republic of China has been persistently bold in its pursuit of a CBDC, establishing itself as a distinguished chief within the burgeoning world market.