The Hong Kong Monetary Authority (HKMA) has initiated the second phase of its e-HKD pilot program, inviting the financial industry to contribute potential applications for the digital currency. This move, announced on March 14, aims to assess the capabilities of the digital version of the Hong Kong dollar.
Exploring New Horizons for e-HKD
HKMA is focusing on refining the applications involving programmability, tokenization, and the settlement process, building on the insights gained from phase one. The authority also seeks to investigate additional use cases not previously covered.
Interested market players have until May 17 to present their proposals, with the second phase expected to run until mid-2025. This extended timeline is set to give participants a sufficient period for thorough testing and evaluation of their innovative concepts.
Participants in the pilot program must adhere to HKMA’s guiding principles, which include the novelty of the application, the enhancement of consumer experience, readiness for market trials, regulatory compliance, and optimizing e-HKD utilization within Hong Kong.
Strengthening Hong Kong’s Digital Finance Ambitions
This CBDC endeavor is part of the Fintech 2025 strategy, launched by the government in 2021 to advance digital finance in the region. The HKMA, having studied CBDCs since 2017, is now actively preparing Hong Kong for a future inclusive of both retail and institutional CBDC platforms.
Notable financial entities, including Visa, have already been involved in e-HKD trials, collaborating with local banks to test digital currency transactions through blockchain technology, demonstrating a commitment to integrating digital currencies into the financial ecosystem.