Welcoming Remarks at the CBDC Expert Group Memorandum of Understanding (MoU) Signing Ceremony

Distinguished guests, ladies and gentlemen,

1. Good morning, and a warm welcome to everyone joining us today for the MoU signing ceremony.
2. It is our honour to have your presence to witness the formal establishment of the Central Bank Digital Currency (CBDC) Expert Group through the signing of a MoU between the HKMA and your respective universities.
3. This represents an important step forward in our efforts to collectively push the forefront of CBDC research for not just Hong Kong, but also for the global central banking community.

HKMA’s CBDC journey

4. CBDCs continue to attract international attention with many central banks dedicating significant research resources in exploring the designs and implications for the issuance of a CBDC.
5. The HKMA recognises that CBDCs have the potential to unlock unrealised economic value by transforming the ways we transact and the systems we transact on. However, its implementation will require conscious and careful balancing with existing systems, processes and stakeholders to ensure these new payment rails can be well integrated into the fabric of our society.
6. This is why the HKMA has been proactively researching on CBDC at both wholesale and retail levels, as part of our “Fintech 2025” strategy to future-proof Hong Kong for CBDCs.
7. Project mBridge is one such flagship project. It is a joint collaboration between the HKMA and three other central banks under the guidance of the Bank for International Settlements Innovation Hub. This project is one of the most advanced projects of its kind globally and is well recognised by the international financial community.
8. The HKMA has also been studying the prospect of issuing a retail CBDC in Hong Kong. We have been conducting substantial research work in this area in the past two years. Earlier this year, we commenced the e-HKD Pilot Programme, under which the HKMA is exploring potential use cases for an e-HKD in close collaboration with the industry. Phase 1 of the programme is coming to a close and we will share our key findings and learnings with the general public very soon.
9. These CBDC projects are inherently complicated in a multitude of ways, such as the business, policy and legal issues that they may entail, and the trade-off of different technical designs that may be used to implement a CBDC.
10. These complexities are best addressed by closely collaborating with all key stakeholders. These include not only other fellow central banks and the industry, but also with experts from the academic community. That is why the HKMA has been fostering government-industry-academia collaboration in CBDC research to ensure the relevance of our research and development efforts.

Collaboration between the HKMA and academia

11. In fact, the HKMA has long maintained close collaboration with the academic community on our fintech initiatives. Since its establishment in 2016, our Fintech Facilitation Office has set up various programmes in collaboration with local universities, in particular in grooming Hong Kong’s future fintech talents.
12. Many local universities have since then launched their fintech degree programmes at both undergraduate and postgraduate levels. These efforts are bearing fruits, and these graduates are now entering the workforce of Hong Kong’s fintech industry. Some of them have also made their way to the HKMA.
13. The Industry Project Masters Network scheme – or IPMN as we call it – launched by the HKMA together with the local universities last year was another example. IPMN provides opportunities for students to work on the industry’s fintech projects and gain hands-on experience and skills. The latest edition was successfully concluded with over 130 students participating.
14. The academic community has also provided research support to the HKMA in our CBDC explorations. Many of you here today have been in collaboration with participants of the e-HKD Pilot Programme that I mentioned earlier. Some pilots tested the potential use cases for an e-HKD with students and merchants on the campus. These empirical research backed by real-world data have become important inputs for future reference.

Next chapter of collaboration

15. The establishment of the CBDC Expert Group and signing of MoUs today mark the next chapter of collaboration between the HKMA and the academic community. With members coming from multiple disciples covering business, computer science, economics, finance and law, the Expert Group will certainly play a key role in supporting the HKMA’s exploration of key policy and technical issues surrounding CBDC.
16. I’m pleased to know that some members of the Expert Group have already kick-started working with the HKMA on two research papers related to privacy and interoperability of CBDCs. I look forward to reading your outcomes soon.
17. Given the complexities of CBDCs, more research would need to be done. This is not going to be a sprint, but more a marathon. As the saying goes, “If you want to go fast, go alone. If you want to go far, go together.”
18. So thank you for being with us in this CBDC journey. Thank you.