Hong Kong looks to the future: plans for the digital Hong Kong Dollar

Hong Kong Plans to Introduce the Digital Hong Kong Dollar

Hong Kong, a hub of technological advancement, is planning to expand the testing of the Chinese digital yuan and create its own central bank digital currency (CBDC). In the initial phase of the digital Hong Kong Dollar, users of the digital yuan will have the option to top up their wallets through the existing Faster Payment System (FPS), enabling wallet-to-wallet payments using email addresses and phone numbers.

Support for Cross-Border Connections and Retail Applications

Hong Kong’s CBDC project aims to enhance connections between mainland China and the rest of the world, which has always been a key objective of CBDCs. The Hong Kong Monetary Authority (HKMA) completed the first phase of testing the digital version of the Hong Kong dollar, named e-HKD, in October 2023. It now plans to start the second phase of experiments, covering retail applications, programmable payments, offline payments, and decentralized deposits.

Ambitious Projects Involving Digital Assets

Hong Kong is also undertaking ambitious projects related to digital assets, such as the mBridge CBDC project in collaboration with the Bank for International Settlements, HKMA, and the central banks of China, Thailand, and the UAE. Additionally, the issuance of the first multicurrency tokenized bond by Hong Kong was announced in February 2023, followed by another issuance of green tokenized bonds in February 2024.

Progressive Approach to Regulation

HKMA and the Treasury are concluding consultations on the regulation of stablecoins issuance. Hong Kong seems to be striving for growth in the digital asset market and aspires to become a future hub in this field. At the same time, other countries such as the USA and Canada are also pursuing their plans to introduce their own CBDCs.

Hong Kong is actively working on cutting-edge solutions in the realm of digital currencies and assets, aiming to solidify its position as a leader in this field on the international stage.