Experts forecast that Hong Kong could add $20.5 billion to its economy by 2032 as it ramps up CBDC and tokenization initiatives, while the growth of the Web3 sector is also seen as a contributor.
The new iteration of its CBDC, the e-HKD, intends to explore new use cases for the CBDC in retail and wholesale verticals, according to the Hong Kong Monetary Authority.
Hong Kong’s budget revealed the city is expanding its digital yuan pilot testing to allow residents to top up e-CNY wallets through the FPS real-time system.
Wrapping up its e-HKD pilot, Hong Kong's central bank said programmability, tokenization, and atomic settlement are the key areas that local businesses and consumers would greatly benefit from.
Hong Kong has established an expert group for central bank digital currency comprised of academics who will focus on research, privacy tech, and interoperability, adopting a gradual approach.
Standard Chartered (Hong Kong) has completed a pilot program testing offline functionalities of a CBDC, focusing on areas with limited internet access and power supply.
HSBC and HKUST Business School collaborate on a hypothetical e-HKD pilot to aid Hong Kong Monetary Authority in CBDC development, exploring programmable features and potential retail use cases.
The Hong Kong Monetary Authority’s pilot will explore six categories of use cases, including offline payments, tokenized deposits, and settlement of Web3 transactions.
Eddie Yue, head of the HKMA, noted that the trials would involve commercial banks and are scheduled to begin sometime in the fourth quarter.
The HKMA has not yet issued a time frame, but experts believe that a full launch could take up to two years due to the amendments the legislature will have to make to give the CBDC legal backing.
The HKMA has issued a discussion paper titled "e-HKD: A policy and design perspective," where it laid out the central banker's thoughts on retail CBDC and invited public opinion.
The Hong Kong Monetary Authority has released a whitepaper for the e-HKD, outlining the technical aspects of the central bank digital currency as well as policy considerations.
