Hong Kong is preparing to launch its very own central bank-backed digital currency (CBDC). The Hong Kong Monetary Authority (HKMA) has initiated a pilot program for the e-Hong Kong dollar (e-HKD), involving 16 carefully selected firms from the financial, payments, and technology sectors.

These firms will test the digital currency across six categories, including full payments, tokenized deposits, and settlement of Web3 transactions. The HKMA is exploring innovative use cases and working to maximize its readiness for a potential e-HKD. While no decision has been made on whether to issue a digital currency, the HKMA is fully aware that it must enhance payment efficiency and convenience compared to existing methods.

Chief Executive of the HKMA Mr. Eddie Yue said, “We are excited to kick-start the e-HKD Pilot Programme, which serves as a tremendous opportunity for the HKMA to collaborate with the industry in exploring innovative use cases and maximizing our readiness for a potential e-HKD.”

The e-HKD pilot program is part of Rail 2 under the HKMA’s three-rail approach to the possible implementation of a retail CBDC. The HKMA will use the outcomes and insights gained from each pilot to refine its approach and enrich its perspective on the potential implementation of e-HKD.

Stay tuned on HKMA’s website for more updates.

Featured Image by Tim Durgan