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Hong Kong takes first steps on CBDC journey

Hong Kong takes first steps on CBDC journey

The Hong Kong Monetary Authority has taken the first steps on its exploration of a central bank digital currency with the release of a technical white paper on a possible 'e-HKD'.

The paper studies the prospect of issuing retail CBDC in Hong Kong, covering both technical and policy considerations, and aims to come up with an initial view by the middle of next year.

Building on the model for retail CBDC that the HKMA is jointly investigating with the Hong Kong Centre of the BIS Innovation Hub, the document explores potential technical design options for issuing and distributing retail CBDCs, including an arrangement that allows transaction traceability in a privacy-amicable manner.

The HKMA intends to reach out to academics and the wider industry to identify and resolve up to seven major policy areas that have cropped up during the course of the reseach, including knotty issues around privacy, interoperability, performance and scalability, cybersecurity, compliance, resilience, and technological capabilities.

Eddie Yue, chief executive of the HKMA, says: “The white paper marks the first step of our technical exploration for the e-HKD. The knowledge gained from this research, together with the experience we acquired from other CBDC projects, would help inform further consideration and deliberation on the technical design of the e-HKD. We also look forward to receiving feedback and suggestions from the academia and industry to enrich our perspectives.”

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