After collaborating with the BIS Innovation Hub, the Hong Kong Monetary Authority (HKMA) has released a technical information paper on retail CBDCs, called “e-HKD: A Technical Perspective.” The financial institution expects to have an initial proposal for the project by mid-2022.
One step closer to CBDC
HKMA has doubled down on its efforts to launch a digital Hong Kong dollar (e-HKD). After exploring the potential benefits of the project with counterpart central banks, the monetary organization highlighted its official working paper on its future digital retail banking coins.
HKMA’s partner in investigating this move was the Hong Kong Center for BIS Innovation. Together, their task was to analyze the details of the issuance and distribution of digital currencies for the retail central bank.
The white paper differs from other similar papers in that it discloses the technical architecture of the financial solution. According to the announcement, local residents can expect the initial presentation of e-HKD by the summer of 2022.
Notably, HKMA presented its “Fintech 2025” strategy earlier this year, and one of its main focus points was enhanced research work on CBDCs.
Mr. Eddie Yu – CEO of the Capital Markets Authority – indicated that this step represents an important step towards launching an electronic digital in the future:
“The white paper represents the first step in our technical exploration of e-HKD. The knowledge gained from this research, combined with the experience we have gained from other CBDC projects, will help provide further study and deliberation on the technical design of e-HKD. We also look forward to Receive comments and suggestions from academia and industry to enrich our views.”
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Last year, the central banks of the two countries revealed their intention to create a common central bank digital currency, dubbed Project Inthanon-LionRock, to facilitate efficient payments between each other.
At the time, HKMA reported that the current payment system in Hong Kong was highly efficient. As such, it did not need CBDC approval for in-country settlements. However, the authority believed that cross-border payments needed to be improved, and that digital currency could help solve the problem.
Central banks have not given a time frame for launching their upcoming digital banking currency for real transactions. However, they pledged to continue working on the joint project and even add more countries to the Inthanon-LionRock project.
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