By Anndy Lian
The Hong Kong Monetary Authority (HKMA) has made an exciting announcement regarding the launch of the e-HKD Pilot Programme. This initiative involves the participation of 16 carefully selected firms from the financial, payment, and technology sectors. The primary objective of the program is to explore and identify potential use cases for the e-HKD across various categories, including payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions, and settlement of tokenised assets.
List of selected companies and their proposed use cases
- Alipay Financial Services (HK) Limited: Programmable payments – Merchant reward programme
- ARTA-Emali HK Limited: Programmable payments – Investment
- Bank of China (Hong Kong) Limited: Programmable payments – Government grant disbursement; Programmable payments – Prepaid services
- China Construction Bank (Asia) Corporation: Programmable payments – Prepaid services
- Fubon Bank (Hong Kong) Limited: Settlement of tokenised assets
- Ripple Labs Inc.: Settlement of tokenised assets
- Giesecke+Devrient: Offline payments
- Standard Chartered Bank (Hong Kong) Limited: Offline payments
- Hang Seng Bank Limited: Programmable payments – Government grant disbursement; Programmable payments – Merchant reward programme
- Hang Seng Bank Limited: Tokenised deposits
- The Hongkong and Shanghai Banking Corporation Limited: Tokenised deposits
- Visa Inc. : Tokenised deposits
- Industrial and Commercial Bank of China (Asia) Ltd:. Offline payments
- Mastercard Asia/Pacific Pte. Ltd.: Settlement of Web3 transactions
- The Boston Consulting Group: Settlement of tokenised assets
- HKT Payment Limited: Settlement of tokenised assets
- ZA Bank Limited: Settlement of tokenised assets
- The Hongkong and Shanghai Banking Corporation: Limited Full-fledged payments
Chief Executive of the HKMA, Eddie Yue has expressed his enthusiasm for the e-HKD Pilot Programme and its potential to explore innovative use cases while laying the groundwork for the possible implementation of the e-HKD. He has also acknowledged and appreciated the active participation of industry stakeholders in the pilot projects, and extended gratitude to the academic experts who are contributing their knowledge and experience to this important CBDC initiative. The ultimate goal is to foster collaboration among all stakeholders and ensure that the research and development efforts align with practical business opportunities.
The e-HKD Pilot Programme represents a significant step forward in the HKMA’s approach to the development of a potential retail central bank digital currency (CBDC). By working closely with stakeholders, the HKMA will conduct a series of pilot projects aimed at examining use cases and addressing implementation and design challenges associated with the e-HKD. The valuable insights gained from these pilots will inform and enhance the HKMA’s overall strategy and decision-making process in relation to the potential implementation of the e-HKD. It is important to note that a final decision to introduce the e-HKD has not been reached at this stage.
At the commencement event, senior executives from the selected firms had the opportunity to present the key highlights of their proposed use cases. In the coming months, the HKMA will maintain close collaboration with these firms, closely monitoring the progress of the pilot projects. While the specific outcomes may evolve and develop over time, the HKMA plans to share the key learnings and insights with the public during Hong Kong FinTech Week 2023. Additionally, the HKMA has expressed its intention to continue conducting further rounds of pilots in collaboration with industry stakeholders in the future.
In order to facilitate effective collaboration between the government, industry, and academia in the realm of CBDC research, the HKMA will establish a dedicated CBDC Expert Group. Comprised of leading academics from local universities, this group will provide invaluable insights and expertise on policy and technical issues relevant to CBDC, including privacy protection, cybersecurity, and interoperability.
The author is inter-governmental Blockchain adviser, Investor