Digital Hong Kong Dollar to Kick off by Q4 2022

Image Source : China Visual

BEIJING, September 21 (TMTPOST) – The Hong Kong Monetary Authority (HKMA) has committed to rolling out a retail central bank digital currency (CBDC), which was announced on Tuesday.

It will adopt a three-track approach to pave the way for the launch of the Digital Hong Kong Dollar (e-HKD). The first two of these tracks would be launched in the fourth quarter of this year.

The first track focuses on infrastructure, aiming to lay the technical and legal foundation for the future launch of the digital Hong Kong dollar. The second track emphasizes the study of application scenarios and joint industry test runs. The two tracks run in parallel and would be launched simultaneously in the fourth quarter.

In the technical infrastructure of the first track, the digital Hong Kong dollar applied to the wholesale level of interbank banking will be the first step to making a system development plan in about nine months, including the establishment of a project schedule, system design, and resource planning for the wholesale level. It is expected that the wholesale level project can be established in two to three years at the earliest.

The wholesale level is prioritized is because the final design of the user interface at the retail end may be greatly influenced by numerous factors, some of which are yet to be grasped and reviewed, according to the HKMA.

The third track is aimed at the official launch of the digital Hong Kong dollar, based on the experience of the first and second tracks, to make a more comprehensive deployment. The HKMA will set a timetable for the launch of the digital Hong Kong dollar in the third stage, which might take years to be finished.

The HKMA has been studying a central bank digital currency (CBDC) since 2017 and launched a digital Hong Kong dollar project in June 2021. This project is part of the authorities' exploration at the retail level of the CBDC (rCBDC) to satisfy the potential demand of Hong Kong citizens to hold and use e-HKD. The above-mentioned planning for the first track, as it relates to infrastructure, covers both wholesale and retail levels.