Hong Kong advances e-HKD with tokenisation and offline payments
The Hong Kong Monetary Authority (HKMA) has launched the second phase of its digital Hong Kong dollar (e-HKD) initiative, now renamed Project e-HKD+.
This phase involves 21 financial institutions working on 11 use cases, focusing on asset tokenisation, programmability, and offline payments over the next year within a sandbox environment.
Project e-HKD+ aims to explore practical applications for e-HKD and tokenised deposits, addressing challenges in technology and regulatory frameworks.
According to the HKMA, “Project e-HKD+ will advance the technology and legal groundwork to support the potential issuance of an e-HKD,” while also evaluating various use cases in the financial sector.
Participants such as Hang Seng Bank, Aptos Lab, and Boston Consulting Group are exploring the settlement of tokenised funds on a public blockchain.
Another initiative involving Visa, ANZ, Fidelity, and ChinaAMC is examining near-real-time settlement for interbank transfers and cross-border payments using e-HKD and tokenised deposits.
Additionally, the project will look into programmability use cases, including rewards platforms like the one being developed by DBS Bank for environmental, social, and governance (ESG) incentives.
The Bank of Communications (Hong Kong) and China Mobile (Hong Kong) are working on enabling offline e-HKD payments using mobile SIM cards.
Alongside these developments, the HKMA will establish an e-HKD Industry Forum where participants can collaborate on shared issues.
The first working group will focus on the programmability aspect of the digital currency.
Since the e-HKD project began in 2021, the HKMA has continued to assess the potential of a central bank digital currency (CBDC) for Hong Kong’s financial system, with this phase expanding the focus to include broader applications and technologies.
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