Crypto

[NEWS] Hong Kong begins phase 2 of CBDC "e-HKD" trial operation

2024/08/09 09:15 (Updated 2024/12/13 18:27)
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[NEWS] Hong Kong begins phase 2 of CBDC "e-HKD" trial operation

Progress in CBDC efforts

The Hong Kong Monetary Authority (HKMA), Hong Kong's central bank, announced that Hong Kong's CBDC (central bank digital currency) "e-HKD" has entered phase 2 of the pilot.

The HKMA will explore new use cases from Phase 1, which ended in October 2023, and will delve deeper into "selected pilot operations." It explains that it will particularly explore innovative uses of CBDC for public use.

Six use cases were tested in Phase 1. The usage scenarios included "programmable payments," "tokenized asset settlement," "online payments," "payments in stores and restaurants," "collection of government payments," "tokenized deposits," and "Web 3.0 trading and clearing."

Regarding Phase 2, the HKMA said in a statement, "Building on the success and experience of Phase 1, the next phase will delve deeper into where e-HKD can add unique value, programmability, tokenization, and atomic payments (direct instantaneous payments between parties)." This will be a step towards the introduction of a retail CBDC that the public can use for shopping, remittances, etc.

Phase 2 will also be supported by a new wholesale CBDC project, Project Ensemble, which will "establish an enhanced e-HKD sandbox." Project Ensemble focuses on an ecosystem for large-scale deployment of CBDC.

The plan is to "accelerate pilot participants' prototyping, development and testing of use cases, and promote research into interoperability and interbank settlement between e-HKD and other forms of tokenized money," the HKMA added.

The e-HKD pilot is expected to run until mid-2025, according to the HKMA. Applications from organizations interested in participating in Phase 2 will be accepted until May 17.

Largest banks continue to participate

Many major financial institutions and payment companies, including Alipay, Bank of China, HSBC, Hang Seng Bank, and China Construction Bank, have participated in Phase 1, but this time, private companies are expected to join as well. HSBC, Hong Kong's largest bank, has stated that it will continue to participate in Phase 2.

The HKMA began researching CBDC in 2017. In 2021, it will begin full-scale research into e-HKD in both wholesale and retail formats.

Reference: Announcement
Image: Shutterstock

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Interview Iolite FACE vol.14 Charles Hoskinson, founder and CEO of Cardano/Input Output Global PHOTO & INTERVIEW Mariko Mabuchi Special feature: "Considerations on cryptocurrency-related policies in Japan and the US", "Blockchain guide from Japan", "Huge position liquidation occurs at Hyperliquid! A new, unanticipated crisis in decentralized finance", "Sakana AI, a generative AI startup from Japan that is attracting a lot of attention", "Prepare for a recession: correlation between finance and anomalies" Crypto Journey: "Web 3.0 from the perspective of the 'King of Debate'" Interview with Hiroyuki Special series: Virtual Nishi: "Cryptocurrency market trends and key points for interpreting them" Series: Tech and Future Toshinao Sasaki, etc.