Digital Hong Kong Dollar Trial Underscores Web3 Hub Ambitions – Crypto News – Crypto News
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Digital Hong Kong Dollar Trial Underscores Web3 Hub Ambitions – Crypto News

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2 years ago

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The Hong Kong Monetary Authority (HKMA) has announced the launch of a pivotal trial run for a digital version of the region’s local currency.

Dubbed the e-HKD or “Cyber ​​Hong Kong Dollar,” its trial run marks another step toward digitizing financial transactions, the regulator, which also doubles as the region’s central bank, said in a statement on Thursday.

The launch of the e-HKD pilot arrives at a crucial juncture when digital wallet usage is expected to surpass credit cards in Hong Kong by 2025, reflecting the trend of increasingly digitized lifestyles.

Around 16 handpicked banks and payment companies, including industry heavyweights HSBC and Standard Chartered Bank, will undertake tests involving six potential use cases for the digital asset, according to reporting from local media,

The test run, operating within a controlled sandbox environment, is designed to explore multiple applications ranging from online and offline payments, tokenized deposits, programmable payments and Web3 transaction settlement to tokenized asset settlement.

“By promoting cooperation between the government, industry and academia, we hope that research and development work can keep pace with the times,” Eddie Yue Wai-man, CEO of the HKMA, said in the statement.

Encompassing HKMA’s Fintech 2025 strategy, the trial is part of a three-track approach and a broader effort to fortify Hong Kong’s financial technology prowess, first laid out in October 2020.

The HKMA’s three-tier strategy for launching its cbdc This includes establishing a technical and legal foundation, studying use cases and conducting trials, and consolidating those insights to devise a plan and timeline for an official launch.

Hong Kong’s regulator also plans to create a CBDC expert group, partnering with academia to probe into complex policy and technical issues of CBDCs, such as privacy protection, cybersecurity, and connectivity.

In its capacity as a regulatory body, the HKMA is tasked with supervising banks and entities that accept deposits while implementing and enforcing regulations to uphold the reliability of its banking system.

It also plays a large role in furthering Hong Kong’s reputation as a leading international finance and Web3 hub.

The HKMA has not yet decided on an official live roll-out of the e-HKD, with the results of the trial reportedly set to be published sometime in November.

Regulation on CBDCs has been moving forward in a number of jurisdictions globally, such as Canada, Englandand South Korea,

In the US, the notion of a federally controlled digital dollar has faced pushback in some states, including Florida and North Carolina, Its development, meanwhile, has taken a backseat to the Federal Reserve’s upcoming fed now launch.

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