The Hong Kong Monetary Authority (HKMA) is entering the second phase of its e-HKD (e-Hong Kong dollar) pilot program, testing use cases for a possible central bank digital currency (CBDC).<\/p>\n
In a new report issued by the HKMA, the central bank says<\/a> the first phase of the effort had 16 different firms exploring several areas of CBDC use.<\/p>\n \u201cPhase one took deep dives into potential domestic and retail use cases in six categories: full-fledged payments, programmable payments, offline payments, tokenized deposits, settlement of web3 transactions, and settlement of tokenized assets. Sixteen firms from financial, payment and technology sectors were selected to participate.\u201d<\/em><\/p>\n One phase one participant, payments giant Mastercard, explored \u201cwrapping\u201d e-HKD for use across other blockchains by \u201csimulating the purchase of physical items and the contingent exchange of NFTs (non-fungible tokens) \u2013 each representing a digital certificate of authenticity for the physical item \u2013 on a tokenized asset network.\u201d<\/p>\n The report notes several worries related to CBDCs, including privacy concerns expressed by those surveyed leading up to the phase one launch in November 2022.<\/p>\n \u201cRespondents were generally receptive to an e-HKD, although they highlighted the need to study the commercial viability of use cases and other issues such as privacy protections and legal considerations.\u201d<\/em><\/p>\n The report also flags security concerns regarding programmable retail CBDCs (rCBDCs), which consumers would use.<\/p>\n Says the report,<\/p>\n \u201cAn rCBDC issued as programmable money may be more susceptible to cybersecurity risks, as it may present more mediums for external threats to inject malicious code. A delicate balance will therefore need to be struck between facilitating the industry\u2019s development of innovative products and services, and ensuring the overall safety of monetary and financial systems.\u201d <\/em><\/p>\n The second phase of the pilot will \u201cbuild on the success of phase one, and consider exploring new use cases for an e-HKD\u201d and \u201cdelve deeper into select pilots from phase one.\u201d<\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>
\n
\nCheck Price Action<\/a><\/span><\/em>
\n
\nFollow us on Twitter<\/a>, Facebook<\/a> and Telegram<\/a><\/span><\/em>
\n
\nSurf The Daily Hodl Mix<\/a><\/span><\/em>
\n<\/p>\n
![](\"https:\/\/dailyhodl.com\/wp-content\/uploads\/2018\/06\/Get-Alerts-728x90.png\")
<\/p>\n