The Hong Kong Monetary Authority (HKMA) has published a report on the first phase of its e-HKD pilot programme which was first launched in November 2022.

An e-HKD is a digital version of the Hong Kong dollar that is issued and backed by the HKMA. It is still under development, but the HKMA is exploring the potential benefits of an e-HKD, such as faster, more cost-efficient, and more inclusive transactions.

The report, which was published on 30 October 2023, discusses the key findings, learnings, and the HKMA’s assessment of 14 pilots conducted by 16 participating firms.

The 16 participating firms include Alipay HK, ARTA-Emali HK, Bank of China (Hong Kong), China Construction Bank, Fubon Bank (Hong Kong), Ripple Labs, Giesecke+Devrient, Standard Chartered, Hang Seng Bank, HSBC, Visa, Industrial and Commercial Bank of China, Mastercard, Boston Consulting Group, HKT Payment, and ZA Bank.

The pilots showed that an e-HKD could add unique value in three main areas; programmability, tokenisation, and atomic settlement.

The HKMA said that it has not yet made a decision on whether and when to introduce an e-HKD, but the report from the first phase of the pilot programme will help to inform its decision.

The next phase of the programme will seek to explore new use cases for an e-HKD and delve deeper into select pilots from the first phase.

Eddie Yue, Chief Executive of the HKMA, said,

“Phase 1 of the e-HKD Pilot Programme has examined many innovative use cases of an e-HKD and has provided valuable insight to the HKMA on how an e-HKD can potentially add tangible value to businesses and consumers.

 

These pilots have also raised a number of areas for future study. We thank all participating firms for their strong interest in the programme, and look forward to continuing our close partnership with the industry in our exploration of central bank digital currencies.”