The Hong Kong Monetary Authority (HKMA), the Bank of Israel (BOI), and the Bank for International Settlements Innovation Hub (BISIH) Hong Kong Centre have joined forces to experiment with a central bank digital currency (CBDC)<\/a>. Known as <\/span>Project Sela<\/span><\/a>, this initiative aims to develop a <\/span>CBDC<\/span> (rCBDC) ecosystem that is efficient, accessible, and secure while prioritizing concerns such as privacy and cybersecurity.<\/span><\/p>\n One of the areas of focus in Project Sela is determining how tasks should be divided between the private sectors. The project envisions a structure where the central bank oversees the ledger and provides accounts to end users while customer-facing services and compliance are managed by sector intermediaries. According to people familiar with the matter, this unique setup will foster innovation, competition, and better service access.<\/span><\/p>\n <\/p>\n In implementing Project Sela\u2019s proposed framework, legal analysis has confirmed its viability by introducing a new category of service providers known as \u201cAccess Enablers\u201d (AEs). These specialised firms manage customer interactions but do not directly control or hold the digital currency. This arrangement eliminates credit risk, as all transactions are settled directly on the central bank\u2019s balance sheet, which maintains the ultimate responsibility for the currency.<\/span>An arrangement like this relaxes standards for AEs, which could lead to a more diverse range of payment service providers and foster a competitive market.<\/p>\n <\/p>\n The focus on <\/span>cybersecurity<\/span> in Project Sela stems from the understanding that increased accessibility may come with risks. By utilising Israel\u2019s expertise in cybersecurity and drawing insights from projects in Hong Kong, the goal is to ensure that security is not compromised while benefiting from accessibility.<\/span><\/p>\n Project Sela\u2019s foundation lies in its backbone, developed in collaboration with sector service providers such as FIS and M10 Networks. Building upon the experiences gained from <\/span>Project Aurum<\/span> in Hong Kong and Israel\u2019s work on its digital Shekel, this venture establishes a base.<\/span><\/p>\n <\/p>\n Collaborations like Project Sela are establishing a blueprint for the future as<\/span> central banks<\/span><\/a> worldwide navigate the transition to CBDCs. By striking a balance between innovation and security and considering public responsibilities alongside private enterprise, this collaboration between Hong Kong and Israel could revolutionize their financial systems and serve as a model for CBDCs globally.<\/span><\/p>\n <\/p>\n \u2713 Share:<\/p>\n <\/a><\/p>\n <!– <\/p>\n <\/p>\n <\/a><\/p><\/div>\n<\/p><\/div>\n <\/p>\n <\/a><\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n –><\/p>\n –><\/p>\n Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114<\/a> and reach out to him at sunil (at) coingape.com <\/p><\/div>\n<\/p><\/div>\n The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.<\/p>\n<\/div><\/div>\n<\/p><\/div>\n <!– <\/p>\nAddressing the Division of Roles<\/b><\/h2>\n
Innovative Access Enablers<\/b><\/h2>\n
Technological Backbone<\/b><\/h2>\n
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