The Hong Kong Monetary Authority (HKMA) today announced the commencement of Phase 2 of the e-HKD Pilot Programme.

The second phase aims to explore innovative use cases for digital money, including e-HKD and tokenised deposits.

This phase is part of Project e-HKD+, an expanded initiative that reflects the HKMA’s broader focus on the evolving digital money ecosystem.

Under Phase 2, 11 groups of firms have been selected to test use cases such as cross-border payments, tokenisation for asset investment, and settlement of tokenised assets.

Payment giant Visa and ANZ will explore how Australian corporates can invest in Hong Kong-based funds using digital currency, testing a sandbox environment to issue fiat-backed tokens and facilitate near-real-time Delivery vs Payment (DvP) settlements for cross-border and interbank transfers.

Visa’s participation follows its work in Phase 1, where it explored interbank B2B payment flows using tokenised deposits.

ANZ brings its experience in decentralised networks and asset tokenisation, including its development of an AUD stablecoin.

Additionally, DBS will explore how digital money can enable a scalable ESG reward platform by driving the adoption of purpose-bound money.

HSBC will investigate the secure use of digital money on permissioned protocols using public distributed ledger technology (DLT) for value storage and transfer, potentially addressing privacy concerns and serving as a settlement utility for tokenised assets.

Mastercard, Kasikornbank (KBank), and Airstar Bank will examine how digital money can facilitate domestic and international trade finance.

The HKMA has also introduced the e-HKD Industry Forum to encourage collaboration among participants.

Industry-led working groups will address issues like programmability and offline payments.

The results of Phase 2 will help the HKMA evaluate the technical and legal groundwork for potential e-HKD issuance, with key findings expected by the end of 2025.

Eddie Yue, Chief Executive of the HKMA, said,

“Project e-HKD+ signifies the HKMA’s commitment to digital money innovation.  The e-HKD Pilot Programme has provided a valuable opportunity for the HKMA to explore with the industry how new forms of digital money can add unique value to the general public.

The HKMA will continue to adopt a use-case driven approach in its exploration of digital money.  We look forward to working closely with industry participants in Phase 2 to co-create various innovative use cases.”

Featured image credit: Edited from Freepik