Hong Kong is preparing to explore new use cases for its central bank digital currency (CBDCs) in the second phase, following the successful completion of the pilot phase.
The first phase focused on full-fledged payments, programmable payments, offline payments, tokenised deposits, and the settlement instructions of Web3 and tokenised assets.
With the conclusion of initial trials, the Hong Kong Monetary Authority (HKMA) said e-HKD (e-Hong Kong dollar) could add "unique" value to the current payment ecosystem in three main areas including programmability, tokenisation, and atomic settlement.
“The next phase of the e-HKD pilot programme will build on the success of Phase 1 and consider exploring new use cases for an e-HKD,” the report said.
It also plans to delve deeper to examine business and implementation issues identified during pilots.
HKMA launched the e-HKD pilot programme in November 2022 to investigate the feasibility of CBDC, as part of its Fintech 2025 strategy.
The programme took a three-rail approach including foundation layer development, iterative enhancements, industry pilots, and full launch.
It is currently at the second rail to take feedback from both public and private sectors to determine the commercial viability of CBDCs.
HKMA has not yet decided on whether and when to introduce an e-HKD as these pilots were conducted on a small scale under a controlled environment.
Going forward, HKMA will investigate and evaluate if these benefits can be realised at a larger scale in real-life applications.
It also plans to continue to work on laying out technical and legal frameworks, establishing an optimal set of protocols, common infrastructure and policy for the e-HKD.
