Hong Kong expands e-HKD pilot with new firms

The Hong Kong Monetary Authority (HKMA) has entered Phase 2 of its e-HKD pilot program, advancing the exploration of digital currencies, including tokenized deposits and e-HKD. 

According to the HKMA, the initiative, now called Project e-HKD+, involves 11 groups of firms exploring use cases in areas like asset settlement, programmability, and offline payments. 

The selected firms come from various sectors, including Hang Seng Bank, Aptos Labs, HSBC, Standard Chartered, Mastercard, and Visa. 

These firms will assess the commercial viability of e-HKD and other digital money forms while addressing practical challenges related to implementing digital currencies in both public and private sectors. 

According to the HKMA’s announcement, the goal of Phase 2 is to develop a framework for the future use of digital money, focusing on the integration of tokenized assets and offline transactions. 

Eddie Yue, Chief Executive of the HKMA, stated, “We look forward to working closely with industry participants in Phase 2.” 

The e-HKD Industry Forum has been established to foster collaboration and address challenges during this phase. 

Launched in 2023, the e-HKD pilot is part of Hong Kong’s broader digital currency initiative. 

Phase 1 focused on developing the foundational technologies and infrastructure required for the central bank digital currency (CBDC), laying the groundwork for the current phase of exploration. 

The pilot program will use a sandbox environment for testing use cases, with key findings expected by 2025. 

The sandbox will allow firms to prototype solutions and evaluate the feasibility of integrating digital currencies into Hong Kong’s financial ecosystem. 

Based on these evaluations, the HKMA aims to advance the future of digital currencies in the region.