Hong Kong’s Monetary Regulatory Authority has initiated Phase 2 of the e-HKD pilot program.
On September 23, the Hong Kong Monetary Authority (HKMA) initiated the second phase of its central bank digital currency (CBDC), e-HKD. In an announcement, the HKMA disclosed that Phase 2 would involve the exploration of the use of e-HKD and tokenized deposits by 11 groups of firms from a variety of sectors.
The digital currency will be evaluated for three qualities by the selected firms, as per the authority: the settlement of tokenized assets, offline payments, and programmability. Nevertheless, they must also assess the commercial viability of this tokenized form of money in real-world applications.
ANZ, Airstar Bank, Aptos Labs, BlackRock, Bank of Communications (Hong Kong), ChinaAMC, China Mobile, DBS, Fidelity International, Kasikornbank, and Sanfield (Management) are among the companies that are participating in the second phase.
In the interim, certain organizations that participated in the initial phase are also involved in Phase 2. These organizations comprise HSBC, Hang Seng Bank, Boston Consulting Group, Standard Chartered, Mastercard, Visa, Bank of China (Hong Kong), China Construction Bank (Asia), and ICBC (Asia).
HKMA’s progress in implementing a digital currency regime in the city, which will encompass CBDC and privately issued tokenized money, will be contingent upon the outcome of the second phase.
The expected duration of the second phase is up to 12 months, with the results expected to be released by the end of 2025. A number of the participants will collaborate on assessing the potential applications. For example, Standard Chartered will work with Mastercard and BlackRock to evaluate the trading and settlement of tokenized assets using e-HKD and digital money. Conversely, the Bank of Communications and China Mobile will evaluate the feasibility of offline payments via SIM cards as an e-HKD wallet.
In accordance with this new commitment, the authority has renamed Project e-HKD+ to reflect its expanded scope, which includes the exploration of the digital money ecosystem, the expansion of tokenized deposits, and the focus on e-HKD.
