Following a collaboration with the BIS Innovation Hub, the Hong Kong Monetary Authority (HKMA) released a technical white paper on retail CBDC, titled “e-HKD: A Technical Perspective”. The financial institution plans to present a first vision of the project by mid-2022.
One Step Closer to a CBDC
The HKMA doubled down on its efforts of launching a digital Hong Kong dollar (e-HKD). After exploring the potential benefits of the project with peer central banks, the monetary organization unveiled its official white paper on its future retail CBDC.
The HKMA’s partner in investigating the move was the Hong Kong Centre of the BIS Innovation Hub. Together, their mission was to analyze the details of the issuance and distribution of digital currencies from retail central banks.
The Whitepaper is different than other similar papers as it reveals the technical architecture of the financial solution. According to the announcement, residents can expect the initial sight of the e-HKD by summer 2022.
It is worth noting that the HKMA introduced the “Fintech 2025” strategy earlier this year, and one of its key focuses was strengthened research work on CBDCs.
Mr. Eddie Yue – Managing Director of HKMA – noted that this decision represents an important step towards the launch of a future digital e-HKD:
“The Whitepaper marks the first step of our technical exploration for the e-HKD. The knowledge gained from this research, along with the experience we have gained from other CBDC projects, would help inform the thinking and deliberations on the technical design of the e-HKD. We also look forward to receiving feedback and suggestions from the academia and industry to enrich our perspectives.”
Hong Kong and Thailand with a joint CBDC project
Last year, the central banks of the two countries revealed their intention to create a common CBDC, dubbed Project Inthanon-LionRock, to facilitate efficient payments between them.
Back then, the HKMA informed that the current payment system in Hong Kong was highly efficient. As such, it did not need to adopt a CBDC for establishments within the country. However, the authority believed cross-border payments need improvement, and digital currency could help solve the problem.
Central banks have not given a timeline for the launch of their next CBDC for real transactions. However, they vowed to continue working on the joint project and even add more countries to the Project Inthanon-LionRock.
