Central Bank Digital Currency (CBDC)

Inspired by the considerable potential that Distributed Ledger Technologies (DLT) hold, the HKMA has been researching CBDC since 2017 to understand their benefits and possible applications.

Expand All
Collapse All
  • Wholesale CBDC

    In 2017, the HKMA commenced Project LionRock, named after Hong Kong’s most iconic mountain, in collaboration with the three note-issuing banks and the Hong Kong Interbank Clearing Limited. This Proof-of-Concept (PoC) project studied potential applications of CBDC in handling large-value payments and delivery-versus-payment settlement.

    In 2019, the HKMA and the Bank of Thailand (BOT) initiated Project Inthanon-LionRock to study the application of CBDC to cross-border payments. The project was completed in December 2019 and a DLT-based PoC prototype was developed successfully together with ten participating banks from both places. The HKMA and the BOT jointly published a leaflet in November 2019 and a report in January 2020 to present the key findings.

    Inthanon-LionRock: Leveraging Distributed Ledger Technology to Increase Efficiency in Cross-Border Payments (Leaflet, Report)

    Project Inthanon-LionRock entered the second phase in 2020. With the joining of the Digital Currency Institute of the People’s Bank of China (PBC DCI) and the Central Bank of the United Arab Emirates (CBUAE) in February 2021, and with the strong support of the Bank for International Settlements Innovation Hub (BISIH) Centre in Hong Kong, the project has evolved into the third phase and was renamed to Multiple CBDC Bridge (mBridge).

    The mBridge project further explores the capabilities of DLT, through developing a trial platform, to facilitate real-time cross-border foreign exchange payment-versus-payment transactions in a multi-jurisdictional context and on a 24/7 basis. The mBridge project also explores business use cases in a cross-border context using both domestic and foreign currencies. Participating institutions jointly published a report in September 2021 to deliver the key takeaways of Project Inthanon-LionRock Phase 2 and introduce the scope of mBridge.

    Inthanon-LionRock to mBridge: Building a multi CBDC platform for international payments

    A brochure was published in November 2021 to present the recent developments of the mBridge project, including the potential business use cases identified, trial transactions on international trade settlement, and an outline of the future roadmap of the platform.

    mBridge: Building a multi CBDC platform for international payments

    In Q3 2022, the mBridge project entered the pilot phase. During the six-week pilot, 20 banks in four jurisdictions used the mBridge platform to conduct over 160 payment and foreign exchange transactions totalling more than HK$171 million. It was among the first multi-CBDC projects to settle real-value, cross-border transactions on behalf of corporates. A report was published in October 2022 to deliver the results and key lessons learnt of the pilot.

    Project mBridge: Connecting economies through CBDC

  • Retail CBDC

    To strengthen research work on CBDC with a view to future-proofing Hong Kong in terms of CBDC readiness, the HKMA has started a study on the prospect of issuing retail CBDC in Hong Kong, i.e. e-HKD, covering both technical and policy considerations.

    Building on the model for retail CBDC jointly investigated by the HKMA and the BISIH Centre in Hong Kong, a technical whitepaper was released in October 2021 to explore potential technical design options for issuing and distributing retail CBDC. The whitepaper is the first among similar papers published by central banks to unveil a technical architecture that includes a ground breaking privacy preservation arrangement that allows transaction traceability in a privacy-amicable manner.

    e-HKD: A technical perspective


    Following the release of the technical whitepaper, the HKMA published a discussion paper in April 2022 which discussed the potential benefits and challenges brought by retail CBDC, various design considerations (including issuance mechanism and legal considerations) as well as use cases of e-HKD. The discussion paper invited feedback from members of the public on a wide range of policy issues.

    e-HKD: A Policy and Design Perspective


    After the two rounds of market consultation, the HKMA published a position paper in September 2022 to set out its policy stance on e-HKD and outline its next steps. It also announced that it will start paving the way for any possible e-HKD implementation in a prudent manner by adopting a three-rail approach.

    Rail 1 – Laying the foundations

    Rail 1 aims to lay the technology and legal foundations for supporting the future implementation of e-HKD.

    Rail 2 – Deep-dive application research and pilots

    Under Rail 2, which will run in parallel to Rail 1, the project team will take deep dives into use cases, and implementation and design issues relating to e-HKD, including deepening our research into application issues and gaining actual experience through conducting a series of pilots with various stakeholders, including banks and the industry. 

    Rail 3 – Rolling out e-HKD

    Our work under the first two rails should help lay the foundations and put in place some essential building blocks for any future implementation of e-HKD. Rail 3 is concerned with launching e-HKD.

    In managing the timeline for rolling out e-HKD, the HKMA would pay particular attention to emerging market trends and international developments so that e-HKD can be made available in good time to address market demands and strengthen our competitiveness in the global payment arena. Please refer to the paper below for a more detailed illustration of the three-rail approach.


    e-HKD – Charting the Next Steps

Rail 2 - e-HKD pilot programme

The HKMA launched the Rail 2 - e-HKD pilot programme (“Rail 2 Pilot”) in November 2022. A component of the programme is the e-HKD sandbox, through which various stakeholders, including banks and the industry, can take deep dives into use cases, examine implementation and design issues relating to e-HKD, and gain actual experience.

Expand All
Collapse All
  • Eligibility criteria

    Applications for the Rail 2 Pilot will be assessed against the following criteria:

    • Hong Kong-centric – the proposed solution should aim to maximise the potential use of e-HKD
    • Forefront of innovation – the proposed solution should showcase innovative elements and differ significantly from existing market offerings. It could be a new business model, a new market, or a new version of an existing product
    • Customer-centric – the proposed solution should aim to enhance customer experience or solve their existing pain points
    • Readily testable – the proposed solution should be ready to be tested in the market by selected group(s) of customers; relevant risks have been identified with appropriate mitigants in place; and sufficient resources including capital and manpower have been committed
    • Regulation-compliant – the proposed solution should be compliant with existing licensing requirements
  • Application procedure
    • Interested parties should complete the application form and submit it to the HKMA via cbdc@hkma.gov.hk with the subject “Application for Rail 2 Pilot” on or before 31 January 2023. The completed form must be accompanied by the project proposal as well as detailed information of the proposed solution.
    • If the application is assessed to be fit for the Rail 2 Pilot, the HKMA will contact the applicant and provide onboarding details.
  • Contact us

    Enquiries about the Rail 2 Pilot can be addressed to the HKMA via cbdc@hkma.gov.hk

Last revision date : 13 September 2023