Hong Kong Takes it First Step in Retail Central Bank Digital Currencies with e-HKD

Hong Kong Takes it First Step in Retail Central Bank Digital Currencies with e-HKD

by October 5, 2021

The Hong Kong Monetary Authority (HKMA) has released a technical whitepaper on retail central bank digital currency (CBDC), titled “e-HKD: A technical perspective”.

Building on the experience in wholesale CBDCs, in June 2021, the HKMA has started a study on the prospect of issuing retail CBDC in Hong Kong, i.e. e-HKD with the Bank for International Settlements (BIS) Innovation Hub Hong Kong Center.

The project covers both technical and policy considerations, and aims to come up with an initial view by the middle of next year.

The whitepaper also explores potential technical design options for issuing and distributing retail CBDCs.

HKMA said that the whitepaper is the first among similar papers published by central banks to unveil a technical architecture that includes a ground breaking privacy preservation arrangement that allows transaction traceability in a privacy-amicable manner.

One of the issues that HKMA highlighted in the paper includes privacy concerns and the regulator is working on proposing new designs which will maintain user privacy without compromising the integrity of systems.

The regulator will also continue its research on the interoperability between conventional Financial Market Infrastructures (FMIs) and emerging Distributed Ledger Technology (DLT)-based systems based on different underlying technologies (e.g. Corda, Hyperledger Fabric, and Ethereum)

From e-HKD: A technical perspective – Research problems of CBDCs


In the course of this research, the HKMA has also identified a number of issues for further exploration as summarised under the problem statements in the whitepaper, on which the HKMA would reach out to the academia and industry for further views and comments.

The HKMA announced the “Fintech 2025” strategy in June this year, one strategic direction under which is to strengthen research work on CBDCs with a view to future-proofing Hong Kong in terms of its readiness.

Eddie Yue

Eddie Yue

Eddie Yue, Chief Executive of the HKMA said,

“The whitepaper 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.”