Hong Kong advances digital currency with e-HKD pilot phase two

The Hong Kong Monetary Authority (HKMA) has commenced the second phase of its e-HKD pilot program, aiming to assess the value and application of a potential central bank digital currency (CBDC) for Hong Kong.

The program seeks to explore the benefits of programmability, atomic settlement, and tokenization, while also investigating new use cases not covered in the initial phase.

Industry participants are encouraged to apply and submit their innovative use cases by May 17, with the pilot expected to run until mid-2025.

The second phase of the e-HKD pilot will use an enhanced sandbox environment for the development, prototyping, and testing of use cases.

This phase will also study interoperability and interbank settlement between e-HKD and other forms of tokenized money.

The HKMAs ongoing research aims to understand how CBDCs would function within a future digital money landscape, although it remains uncertain whether the HKMA will officially adopt a CBDC.

The HKMA has been exploring the concept of CBDCs since 2017, with the goal of preparing Hong Kong for the potential issuance of digital currencies at both wholesale and retail levels.