Hong Kong launches second phase of e-HKD project, collaborating with multiple financial institutions for testing purposes.
The Hong Kong Monetary Authority (HKMA) announced recently that the e-Hong Kong Dollar (e-HKD) digital currency experiment has entered its second phase and expanded the project to be known as the e-HKD+ project, covering 11 usage scenarios. This phase primarily involves the application of central bank digital currency (CBDC) and tokenized deposits. A total of 21 financial institutions are participating in this sandbox testing phase, which is expected to last for one year.
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e-HKD Focuses on Tokenized Asset Settlement, Programmability, and Offline Payments
The digital Hong Kong dollar e-HKD is pegged to the Hong Kong dollar. The current e-HKD+ program focuses on three main application directions: "tokenized asset settlement, programmability, and offline payments."
| Theme | Participants | Use Case Description |
| Tokenized Asset Settlement | Hang Seng Bank, Aptos Lab, BCG | Testing the settlement of tokenized funds on a public blockchain using digital currency |
| HSBC | Testing the secure operation of digital currency on a permissioned distributed ledger technology (DLT) protocol | |
| Standard Chartered Bank, BlackRock, Mastercard, Liberea | Efficient settlement of end-to-end tokenized fund transactions | |
| Visa, ANZ Bank, Fidelity Funds, China AMC | Near real-time interbank transfers and cross-border payment settlements through e-HKD and tokenized deposits | |
| Programmability | Bank of China (Hong Kong), Sun Hung Kai | Establishing e-HKD infrastructure based on alliance blockchain, applying smart contracts for special fund mechanisms and prepaid scenarios |
| China Construction Bank (Asia) | Testing programmable prepaid for large-scale merchants and exploring e-HKD implementation | |
| DBS Bank | Building a scalable ESG reward platform using digital currency to promote the application of target-restricted currency | |
| Hang Seng Bank | Developing the next generation of open, efficient, and scalable digital reward platforms using digital currency | |
| Mastercard, Kai Tak Bank, Nanyang Bank | Using digital currency to facilitate domestic and international trade financing | |
| Offline Payments | Bank of Communications (Hong Kong), China Mobile (Hong Kong) | Testing offline payments and transfers using e-HKD stored in a mobile SIM card |
| Industrial and Commercial Bank of China (Asia) | Exploring anonymous e-HKD wallets and testing dual offline payments |
The Hong Kong Monetary Authority collaborates with the Bank of France to explore cross-border cooperation on central bank digital currencies
Encouraging Enthusiasts to Participate and Expand e-HKD Possibilities
This project started in 2021 and will enter its second phase in March 2023, with applications from enthusiasts accepted in May of the same year. The Monetary Authority also announced the establishment of the "e-HKD Industry Forum" to facilitate discussions among project participants and set up working groups to address specific issues, with programmability of e-HKD as a primary goal.
In addition, the Hong Kong Monetary Authority is open for enthusiasts to apply for participation in the Generative AI Sandbox, which will operate jointly with Cyberport at the Hong Kong Science and Technology Park. This project primarily focuses on the application of AI in the financial sector, as well as risk control, anti-fraud measures, and enhancing user experience.
The Hong Kong Monetary Authority announced stablecoin issuers participating in the "sandbox": JD Coinlink/Circle Coin Innovation/Standard Chartered/Animoca Brands/Hong Kong Telecom
Related
- The British Financial Trade Association and banks successfully test CBDC, moving towards tokenization of securities next.
- Standard Chartered Bank joins China's CBDC pilot program to expand cross-border merchant payments and trade financing.
- Learning from AMM, the BIS Innovation Hub's Project Mariana aims to support cross-border foreign exchange transactions of multiple countries' CBDCs.