Hong Kong Starts New Phase of CBDC Testing

Phase 2 of the e-HKD pilot will be supported by the recently launched regulatory sandbox for testing wholesale CBDCs and tokenization, the Hong Kong Monetary Authority said.

AccessTimeIconMar 14, 2024 at 11:54 a.m. UTC
Updated Mar 14, 2024 at 11:56 a.m. UTC

The Hong Kong Monetary Authority (HKMA) has kicked off the second phase of its central bank digital currency (CBDC) pilot, the e-HKD, the regulator said Thursday.

The central bank will continue testing from the first phase and explore new applications of a digital version of the Hong Kong dollar. The HKMA completed Phase 1 of the pilot program, which tested using a CBDC in domestic retail payments, offline payments and settlement of tokenized assets.

“The next phase will delve deeper into select pilots from Phase 1 where an e-HKD could add unique value, namely programmability, tokenization and atomic settlement, as well as explore new use cases that have not been covered in the previous phase,” the regulator said.

Earlier this month, the HKMA started a regulatory sandbox project to test CBDCs for wholesale use and tokenization, which the regulator says will support Phase 2 of the e-HKD pilot.

Hong Kong is among more than 100 jurisdictions worldwide exploring the issuance and applications for CBDCs – with some regulators convinced trusty central bank money could compete with payments-focused private crypto such as stablecoins.

Organizations interested in participating in the pilot can apply by May 17, the announcement said.

Edited by Parikshit Mishra.


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Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.