Central Bank Digital Currency (CBDC)

The HKMA has been researching CBDCs since 2017 to understand their benefits and potential applications. As part of the “Fintech 2025” strategy announced in 2021, the HKMA has placed increased emphasis on strengthening its research work to increase Hong Kong’s readiness in issuing CBDCs at both wholesale and retail levels.

Wholesale CBDC

The HKMA’s initial exploration of CBDCs focused on wholesale CBDCs. In 2017, the HKMA commenced its CBDC journey with Project LionRock. This was a proof-of-concept (PoC) project that studied potential applications of CBDCs in handling large-value payments and delivery-versus-payment settlements. This project was named after Hong Kong’s most iconic mountain, in collaboration with the three note-issuing banks and the Hong Kong Interbank Clearing Limited.

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  • Project Inthanon-LionRock

    In 2019, the HKMA and the Bank of Thailand (BOT) commenced Project Inthanon-LionRock to study the application of CBDCs for cross-border payments. This 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 and a report in November 2019 and January 2020 respectively to present the key findings.

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

    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 as the Multiple CBDC Bridge (mBridge).

  • Project mBridge

    Project mBridge 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. Project mBridge 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 development progress of Project mBridge, 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, Project mBridge 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

    A brochure was published in October 2023 to provide an update on and outline the next steps for Project mBridge.

    Project mBridge Update: Experimenting with a multi-CBDC platform for cross-border payments

Retail CBDC

The HKMA officially began researching retail CBDC in 2021, and has embarked on Project e-HKD to study the prospect of issuing a retail CBDC in Hong Kong, i.e. an e-HKD, since June 2021, covering both technical and policy considerations. The HKMA has not yet reached a policy decision on whether or when to introduce an e-HKD. It will continue to actively engage the industry, academia and other stakeholders, as well as participate in international fora and monitor international developments on retail CBDCs.

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  • HKMA’s Policy Stance on e-HKD

    The HKMA conducted two rounds of market consultations on issuing an e-HKD, with one on high-level technical designs, and the other on key policy and design issues. The HKMA published a paper in September 2022 to provide its initial views on how to best position Hong Kong for future developments in the sphere of digital currencies and payments.


    Technical Perspective

    A technical whitepaper titled “e-HKD: A technical perspective” was published in October 2021 to explore potential technical design options for issuing and distributing a retail CBDC. This whitepaper builds on the model for a retail CBDC as jointly investigated by the HKMA and the BISIH Centre in Hong Kong. It is the first among similar papers published by central banks to unveil a technical architecture that includes a ground-breaking privacy preservation arrangement that allow transactions to be traced in a privacy-amicable manner.

    e-HKD: A technical perspective


    Policy and Design Perspective

    A discussion paper titled “e-HKD: A Policy and Design Perspective” was published in April 2022. It discusses the potential benefits and challenges of an e-HKD, various design considerations (e.g. issuance mechanism and legal considerations), as well as the potential use cases for an e-HKD.

    e-HKD: A Policy and Design Perspective


    Policy Stance and Three-Rail Approach

    Taking into account the findings of the study and the feedback received from these two rounds of market consultation, the HKMA published a position paper titled “e-HKD: Charting the Next Steps” in September 2022 to set out its policy stance on an e-HKD. The paper outlined a three-rail approach that will be adopted to pave the way for the possible implementation of an e-HKD in Hong Kong.

    e-HKD – Charting the Next Steps


    Three-rail approach for the potential implementation of an e-HKD:

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

    Rail 2 runs in parallel to Rail 1, and takes deep dives into potential use cases, and implementation and design issues relating to an e-HKD. In particular, the e-HKD Pilot Programme was launched in November 2022 as a joint effort between the HKMA and the industry to explore and evaluate the commercial viability of potential use cases for an e-HKD as well as to gain actual experience, through a series of pilots conducted with the industry.

    Rail 3 will consolidate the outcomes of Rail 1 and Rail 2 for more thorough implementation planning, and will set the timeline for launching an e-HKD. The progress of Rail 3 will depend on the actual progress made under Rail 1 and Rail 2, as well as the pace of relevant local and international market development. The HKMA has not yet reached a policy decision on whether or when to introduce an e-HKD.

  • e-HKD Pilot Programme

    The HKMA launched the e-HKD Pilot Programme, a key component of Rail 2, in November 2022, and invited industry participants to submit potential use cases for an e-HKD. The HKMA has also developed an e-HKD Sandbox to enable participants of the e-HKD Pilot Programme to accelerate their prototyping, development and testing of their use cases, as well as to gain actual experience.


    Phase 1 of the e-HKD Pilot Programme

    Phase 1 of the e-HKD Pilot Programme commenced in May 2023, and took deep dives into potential domestic and retail use cases in six categories: full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions, and settlement of tokenised assets. 16 firms from financial, payment and technology sectors were selected to participate.

    The HKMA published the “e-HKD Pilot Programme Phase 1 Report” in October 2023 to discuss the key findings, learnings, and the HKMA’s assessment of the conducted pilots. The pilots showed that there were three areas where an e-HKD could potentially add unique value to the current ecosystem, namely: programmability, tokenisation, and atomic settlement. The HKMA recognises that these pilots were conducted on a small scale under a controlled environment. Therefore, further investigation and evaluation would be required to determine if these benefits can be realised at a larger scale in real-life applications.

    e-HKD Pilot Programme Phase 1 Report


    Assessment Criteria for Use Cases

    The HKMA will announce details about its plans for Phase 2 in due course. Applications will be assessed according to the following criteria:

    • Forefront of innovation: The solution should showcase innovative elements and differ significantly from existing market offerings (such as a new business model, market, or version of an existing product);
    • Customer-centric: The solution should enhance the overall customer experience or solve their existing pain points;
    • Readily testable: The solution should allow for market testing with select group(s) of customers. Relevant risks should be identified with appropriate mitigants in place, and sufficient resources including capital and manpower should be committed;
    • Regulation-compliant: The solution should be compliant with existing licensing requirements; and
    • Hong Kong-centric: The solution should maximise the potential use of an e-HKD.
  • Collaborative Projects

    Project Aurum

    In relation to retail CBDCs, the HKMA previously collaborated with the BISIH Centre in Hong Kong and the Hong Kong Applied Science and Technology Research Institute on Project Aurum to create a prototype two-tier CBDC system. This project was the BISIH’s first retail CBDC project, and it studied the high-level technical design for a retail CBDC. Project Aurum resulted in the creation of a prototype two-tier CBDC system, which comprised a wholesale interbank system and a retail e-wallet system. A report was published in October 2022.

    This project laid a solid foundation for the HKMA’s subsequent retail CBDC projects (such as Project Sela), and also helped shed light on the CBDC journey for other central banks by making the source code and technical manuals accessible to all central banks.

    Project Aurum: A Prototype for Two-tier Central Bank Digital Currency (CBDC)


    Project Sela

    The HKMA collaborated with the Bank of Israel and the BISIH Centre in Hong Kong on Project Sela. This project was a joint experiment testing the feasibility of a retail CBDC architecture in promoting competition and innovation in digital payments amongst private sector intermediaries, with analysis in the areas of policy, cybersecurity, legal and technology. The proposed architecture, established as a proof of concept, allowed such intermediaries to connect directly to the CBDC ledger of the central bank. A report was published in September 2023.

    This project demonstrated that the proposed architecture could feasibly promote competition and innovation in digital payments, whilst attaining desirable levels of access and cybersecurity. In addition, it demonstrated that public-private partnerships could support the development of a vibrant ecosystem of private sector intermediaries.

    Project Sela: an accessible and secure retail CBDC ecosystem

  • List of CBDC Expert Group members




    The Chinese University of Hong Kong

    CUHK Business School

    Professor Seen-Meng CHEW

    The Chinese University of Hong Kong

    Faculty of Engineering

    Professor CHAN Chun-kwong

    City University of Hong Kong

    College of Engineering

    Professor WANG Cong

    The Hong Kong Polytechnic University

    Faculty of Engineering

    Professor Allen AU Man-ho

    The Hong Kong Polytechnic University

    Faculty of Engineering

    Professor Daniel LUO Xiapu

    The Hong Kong University of Science and Technology

    HKUST Business School

    Professor TAM Kar-yan, MH, JP

    The Hong Kong University of Science and Technology

    HKUST Business School

    Professor Allen HUANG Hao

    The University of Hong Kong

    Faculty of Engineering

    Professor YIU Siu-ming

    The University of Hong Kong

    Faculty of Engineering

    Dr John YUEN Tsz-hon

    The University of Hong Kong

    Faculty of Law

    Professor Douglas ARNER

    The University of Hong Kong

    HKU Business School

    Professor LIN Chen

    The University of Hong Kong

    HKU Business School

    Dr YOU Yang


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Last revision date : 04 March 2024