The Hong Kong Financial Authority (HKMA) has issued the primary technical whitepaper addressing its retail central financial institution digital foreign money (CBDC). The whitepaper revolves across the options of the e-HKD.
The HKMA has launched this whitepaper with the collaboration of the BIS Innovation Hub. HKMA expects to develop its preliminary view of the CBDC by mid-2022.
HKMA to Launch a CBDC
This current growth locations the HKMA nearer in the direction of launching a digital Hong Kong greenback. Earlier than publishing this whitepaper, the HKMA had partnered with different central banks to evaluate the viability of this challenge.
One of many our bodies actively concerned in these investigations was the Hong Kong Centre of the BIS Innovation Hub. The 2 establishments got here collectively to investigate a number of particulars concerning the issuance and distribution of a retail CBDC.
This whitepaper has distinctive options in comparison with different related whitepapers. It addresses the technical infrastructure of the CBDC and the way it can ship a monetary resolution. The announcement additional states that an preliminary outlook of the e-HKD will probably be revealed by mid-2020.
The HKMA began its plans for CBDC growth earlier this yr after launching the “Fintech 2025” roadmap. The primary goal of this roadmap was to supply analysis work on CBDCs.
The Chief Government of HKMA, Eddie Yue, commented on the publication of this whitepaper stating, “The whitepaper marks step one of our technical exploration for the e-HKD. The information gained from this analysis, along with the expertise we acquired from different CBDC tasks, would assist inform additional consideration and deliberation on the technical design of the e-HKD.”
Thailand and Hong Kong Companion for CBDC Challenge
In 2020, the central banks of Hong Kong and Thailand revealed plans to launch a joint CBDC. The challenge, which was named “Inthanon-LionRock” would increase cost effectivity between the 2 nations.
Nevertheless, on the time, the HKMA didn’t present any curiosity in a CBDC growth, and as a substitute, it said that its present cost system was extremely environment friendly. Therefore, the nation didn’t want a CBDC to settle monetary transactions.
Alternatively, the HKMA recognized present challenges with cross-border funds, which may solely be solved by way of the event of a digital foreign money.
The HKMA didn’t concern any exact timeframe relating to the CBDC growth and when it might be out there for transactions. Nevertheless, the authority has said that it might proceed working with the joint challenge with Thailand and even said that extra nations could be added to make cross-border transactions extra environment friendly.
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