The Hong Kong Monetary Authority (HKMA) has initiated the second phase of its digital Hong Kong dollar (e-HKD) pilot program, collaborating with 21 financial institutions on 11 distinct use cases centered around central bank digital currencies and tokenized deposits. Given the expanding nature of this initiative, the HKMA has rebranded it as Project e-HKD+.
This new phase will introduce a dedicated sandbox environment and is expected to span approximately one year.
Project e-HKD+ will concentrate on three primary themes: the settlement of tokenized assets, programmability, and offline payment capabilities. A number of the proposed use cases are rather broad in nature, with some not directly mentioning the e-HKD. For instance:
Despite this, the HKMA underscored in a statement that the project aims to “continue to advance the technology and legal framework necessary for the potential rollout of an e-HKD.” Some additional use cases under consideration are notably specific:
Among the programmability-focused cases are reward platforms, including an environmental, social, and governance (ESG) reward initiative currently being explored by Singapore’s DBS Bank. Meanwhile, Bank of Communications (Hong Kong) and China Mobile (Hong Kong) are investigating the use of e-HKD stored on mobile SIM cards to facilitate offline payments and transfers.
Related:
Hong Kong’s Project Ensemble sandbox is prepared to test asset tokenization.
The HKMA remains proactive in its endeavors. The digital Hong Kong dollar initiative commenced in 2021, with the announcement of the second phase occurring in March, followed by a call for applications from potential participants that lasted until May.
Source:
HKMA
In addition, the HKMA revealed plans to establish the e-HKD Industry Forum, a platform for project participants to discuss shared challenges and for working groups to tackle specific topics. The inaugural working group will center on programmability.
Furthermore, the HKMA has announced that it is now accepting applications for involvement in its Generative AI sandbox. This initiative will be conducted in partnership with the state-owned technology firm Cyberport and will explore AI applications aimed at enhancing risk management, anti-fraud strategies, and overall customer experience within the financial sector.
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