e-HKD trials to begin in coming months

22 Sep 2022

Hong Kong is planning to start trials on the e-HKD currency, the digital version of the Hong Kong Dollar, for the remainder of the year.

According to an announcement by the Hong Kong Monetary Authority, the trials will be enabled thanks to the adoption of legislative amendments and the construction of the required digital infrastructure to support the project, South China Morning Post reports. 

The pilot phase of the trials follows on from research carried out to determine possible demand, privacy aspects and other issues surrounding the launch of a central bank digital currency (CBDC). 

Chief executive of the Hong Kong Monetary Authority, Howard Lee said of the trials: “Although there might not be an imminent use case for e-HKD, taking into account the findings of our study and the feedback from market consultation and international development, the HKMA will start paving the way for e-HKD implementation and will proceed toward a launch of e-HKD in the future.”

In addition, the project will involve selected banks, tech firms and payment providers. They will analyse the digital currency’s usage among employees and a certain number of clients. Lee added: “The purpose of introducing the e-HKD is to provide more choice for the customer.” He also stressed the fact that the move will not affect Hong Kong’s three note-issuing banks, Bitcoin.com reports.

After the pilot phase, the timeline for the launch of the digital Hong Kong Dollar will be set by the Hong Kong Monetary Authority, says Colin Pou, executive director for financial infrastructure. The CBDC plans were first mooted in June last year, within the Fintech 2025 strategy. In October a white paper was issued, and consultations came to a conclusion in May.