Hong Kong launches pilot programme on central bank digital currency
The Hong Kong Monetary Authority (HKMA) has commenced a e-HKD Pilot Programme to allow the industry and regulators to consider different use cases and design choices and co-create new payment functionalities and infrastructures. The Pilot Programme will inform future decisions on whether to implement e-HKD, which would depend on whether it can make payment more efficient and convenient than the existing payment methods and unlock new business opportunities. 16 companies have been selected to participate in the first batch of the Pilot Programme for 2023 and will work on 14 pilots spanning across six major categories, covering programmable payments, “dual offline” payments, and other new developments with the use of blockchain technology, such as settling Web3 transactions and tokenized assets. Key findings from the pilot programme are expected to be shared at the Kong Kong FinTech Week in November later this year. Additionally, the HKMA is looking to foster closer government-industry-academia collaboration on central bank digital currency (CBDC) and plans to form a CBDC expert group to study a range of issues such as privacy protection, cybersecurity, and interoperability.
The announcement comes as CBDC becomes a key focus for central banks globally. The European Central Bank (ECB) has published an update on its CBDC project as it enters the final stage of the investigation phase exploring the design and distribution implications of a digital euro. The report underlines the importance of availability, holding limits, onboarding, cross-currency functionality, and contactless technology. The EU intends to issue proposals to establish a digital euro this summer.
Fabio Panetta, Member of the ECB Executive Board, has called for legal tender status for the digital euro with mandatory acceptance by merchants. He also suggested requiring euro-area banks to make the digital euro available to their customers to ensure broad access.
Bloomberg
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