Sixteen banks, payments and technology firms to pilot digital Hong Kong dollar

The Hong Kong Monetary Authority (HKMA) has officially launched six first-round pilots of a digital Hong Kong dollar or e-HKD with support from 16 banks, payments and technology firms to test the prototype central bank digital currency (CBDC) across a range of use cases including in-store, online and offline payments.

The HKMA also now plans to establish a CBDC Expert Group made up of “leading academics from local universities who will contribute valuable insights to support Hong Kong’s future exploration on key policy and technical issues surrounding CBDC, such as privacy protection, cybersecurity and interoperability”, the authority says.

“The pilots will take deep dives into potential use cases in six categories, including full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions and settlement of tokenised assets,” the HKMA explains.

“The outcomes and insights gained from each pilot would help enrich the HKMA’s perspective and refine the HKMA’s approach to the possible implementation of e-HKD.

“The HKMA is not yet at a point where a firm decision can be made to introduce e-HKD.”

The 16 banks, payment services and technology providers taking part in the pilot are: Alipay, Arta/Emali, Bank of China (Hong Kong), Boston Consulting Group, China Construction Bank, Fubon Bank, Giesecke+Devrient, Hang Seng Bank, HKT Payment, HSBC, Industrial and Commercial Bank of China, Mastercard, Ripple, Standard Chartered Bank, Visa and ZA Bank.

“While the actual outcome and results of the pilots may evolve over time, the HKMA aims to share the key learnings with the public at Hong Kong FinTech Week 2023. The HKMA expects to conduct more rounds of pilots with the industry in the future,” the authority adds.

HKMA unveiled a prototype two-tier CBDC ecosystem for contactless payments in stores in October 2022.

Sixteen banks, payments and technology firms to pilot digital Hong Kong dollar was written by Tom Phillips and published by NFCW.