Hong Kong to start testing digital currency in months

China’s Hong Kong Special Administrative Region plans to trial a digital version of the dollar as early as this year in preparation for a final rollout. China is trying to catch up with countries that have already launched central bank digital currencies, such as the People’s Republic’s digital yuan project.

Digital Hong Kong Dollar Trial Scheduled for Q4

Hong Kong plans to begin testing a currency called e-HKD, a digital version of the Hong Kong dollar, in the remaining months of this year. The Hong Kong Monetary Authority (HKMA), quoted by the South China Morning Post, said the trial would be expedited by adopting legal changes and building the digital infrastructure needed to support the project.

The pilot phase follows consultations conducted to gather feedback on potential demand, privacy aspects, and other issues that may arise in connection with the issuance of a Central Bank Digital Currency (CBDC). will be split. Howard Lee, deputy chief executive officer of the HKMA, which serves as a central bank, said:

There may not be an immediate use case for e-HKD, but given our findings and feedback from market consultations and international developments, the HKMA has begun to pave the way for e-HKD implementation and is ready for launch. proceed towardsfuture e-HKD

The official also noted that many jurisdictions are already considering launching CBDCs. Participants in talks held by banking authorities expressed concern that Hong Kong was lagging behind and needed to catch up with international trends.

The exam will involve selected banks, payment providers and technology companies. The agencies plan to investigate the use of digital currencies among their employees and a small number of customers, Lee detailed. “The purpose of introducing e-HKD is to provide customers with more choice,” added the deputy CEO. He also stressed that the move would not affect Hong Kong’s three note-issuing banks.

HKMA sets timeline for e-HKD launch after testing

Colin Pou, executive director of financial infrastructure at the HKMA, said the Hong Kong Monetary Authority will set a launch schedule for the e-HKD following the pilot phase. The regulator first announced his CBDC plans in June 2021 as part of its Fintech 2025 strategy. A white paper he issued in October and talks he concluded in May.

Dozens of central banks around the world are researching digital currencies and taking steps to create their own. The People’s Bank of China (PBOC) has implemented digital yuan (e-CNY) pilot programs in a number of cities, of which he recently announced expansion of pilot areas to provincial level in four cities. Did.

Hong Kong also conducted a small test with e-CNY this year, Howard Lee revealed earlier this month. Last summer, the region’s monetary authority announced that it would link the digital yuan to its domestic payment system. In addition to working with PBOC, HKMA has also worked with central banks of Thailand and the United Arab Emirates on his cross-border CBDC payments.

Do you think Hong Kong will catch up with mainland China in digital currency projects? Let us know in the comments section below.

Lubomir Tasev

Lubomir Tasev, a tech-savvy journalist from Eastern Europe, loves what Hitchens says. In addition to cryptocurrencies, blockchain and fintech, international politics and economics are sources of inspiration.