From the fourth quarter of 2022, Hong Kong authorities will begin testing the retail central-bank digital currency (e-HKD). The report comes from the South China Morning Post.
Earlier, two rounds of public consultations on demand, privacy and potential risks associated with the asset were held. During a briefing on 20 September, HKMA‘s Deputy Chief Executive, Howard Lee, noted that many participants “expressed concerns” about Hong Kong’s delay in launching the digital currency.
“Although in the near term there may be no use cases for e-HKD, taking into account the results of our research and feedback, the HKMA will begin laying the path for its deployment,” Li said.
The test will involve select banks, payments and technology firms. According to a regulator spokesman, the aim of the Hong Kong dollar digital currency is to give customers “a broader choice”.
According to the HKMA, from the fourth quarter it will begin deploying the architecture required for the e-HKD. The Authority will also prepare changes to the law to allow using the digital currency in Hong Kong as legal tender.
In June 2021 the HKMA announced the Fintech 2025 strategy, one of whose main strands is the study of digital currency with a view to readiness for its deployment.
In the autumn the regulator published a white paper entitled “e-HKD: Technical Prospects.”
Earlier, the central banks of the PRC and the UAE joined the “Bridge” project for national digital currencies, launched by the Hong Kong and Thai regulators.
China has been testing the digital yuan for three years. As of 2021 the volume of transactions with the asset reached 87.57 billion yuan (~$13.68 billion), with 261 million unique digital wallets registered.
In September 2022, authorities expanded the pilot program to Sichuan, Hebei, Jiangsu and Guangdong provinces.
Later, participants in a hearing of the US House Committee on Financial Services voted to develop a national “stablecoin” or digital dollar, citing competition from China.
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