Hong Kong regulator launches CBDC pilot

The Hong Kong Monetary Authority (HKMA) has initiated its e-HKD pilot programme, which is considered a crucial element in the potential introduction of a retail central bank digital currency (CBDC).

For the initial round of pilots this year, a total of 16 firms from the financial, payments, and technology sectors have been selected to participate.

The pilots will focus on exploring various use cases across six categories: full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions, and settlement of tokenised assets.

While a decision on a retail CBDC has yet to be made, Eddie Yue, the Chief Executive of HKMA, highlights the e-HKD pilot as an excellent opportunity for collaboration with the industry to explore innovative use cases and enhance preparedness for a potential e-HKD.

The e-HKD pilot programme is part of Rail 2, one of the three stages in HKMA’s approach to potentially implementing a retail CBDC. Each pilot will contribute insights and outcomes that will inform the HKMA’s perspective and refine its approach to the possible implementation of e-HKD.

To foster collaboration between the government, industry, and academia, the HKMA plans to establish a CBDC Expert Group consisting of academics from local universities. This group will further contribute to the exploration and development of the CBDC initiative.