Hong Kong has finished the first pilot section of its central financial institution virtual foreign money (CBDC), the virtual Hong Kong greenback (e-HKD). The Hong Kong Financial Authority (HKMA) is now getting ready for the second one section of the CBDC pilot program.

The Pilot, which began in November 2022, evaluated the CBDC’s business viability as a part of Hong Kong’s Fintech 2025 implementation technique. 

The HKMA To Discover Extra Use Instances For e-HKD

In step with the preliminary file, the section 1 pilot assessed e-HKD software in six key spaces. Those spaces integrated programmable bills, full-fledged bills, offline bills, Web3-based transactions settlements, tokenized deposits, and tokenized assets-based settlements.

The newest file defined tokenization, programmability, and atomic agreement as the principle spaces the place the e-HKD will receive advantages companies and customers. 

Moreover, the HKMA stated the second one section of the e-HKD pilot will consolidate the fulfillment from Segment 1. Right through section 2, the HKMA will discover extra use instances for the CBDC. Additionally, it’ll analysis extra on the ones use instances that proved promising for the e-HKD packages all through the primary trial. In regards to the tech issues for the CBDC, the HKMA may make use of a dispensed ledger technology-based design. The reason being that dispensed ledger expertise gives interoperability and prime scalability, key qualities wanted for the prospective implementation of the e-HKD.

In step with the flowchart above, Hong Kong’s e-HKD undertaking incorporates a three-rail way. Those come with basis layer building, iterative improvements and trade pilots, and whole release.

Right now, the CBDC program is at the second one rail, with fortify from private and non-private organizations. The purpose is to be sure that the CBDC is commercially viable for personal and public organizations.

Additional, the Financial Authority famous that it will proceed running at the rail-1 methods, which contain laying out technical and criminal frameworks for the e-HKD.

The HKMA’s Stance On The mBridge Multi-CBDC Platform

In the meantime, but even so the native CBDC tasks, the Financial institution of Global Agreement (BIS) introduced Mission mBridge in 2021. For context, Mission mBridge is a multi-CBDC platform to facilitate cross-border bills. 

It is a collaborative effort by way of the HKMA, banks of China, Thailand, the UAE, and the BIS Leading edge Hub. The only goal of launching the initiative is to create sooner, extra clear, and less expensive cross-border cost answers the use of the mBridge Ledger. 

But even so the founding central banks of China, Thailand, Hong Kong, and the UAE, a number of business banks have joined the undertaking. 

As of September 25, Eddie Yue, CEO of the HKMA, stated mBridge is turning into commercialized. The growth allowed new member monetary establishments from Hong Kong, China, the UAE, and Thailand. 

Yue steered extra central banks to sign up for the mBride platform. Additionally, he introduced that they’re going to quickly release a brand new product tagged at the least viable product. In step with the HKMA CEO, this new product goals to foster the sluggish commercialization of mBridge.

In step with the BIS October 2023 file, a pilot is ongoing to research the mBridge’s technological and sensible feasibility.

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