The Hong Kong Monetary Authority (HKMA) today (20 September) released a position paper titled “e-HKD: Charting the Next Steps” to set out its policy stance on retail Central Bank Digital Currency (CBDC), i.e. e-HKD, and outline its next steps.
As part of its “Fintech 2025” strategy to future-proof Hong Kong in terms of CBDC readiness, the HKMA has examined the prospect of issuing e-HKD in Hong Kong from both the technical and policy perspectives. Two rounds of market consultation, one on high-level technical design and one on key policy and design issues, were conducted.
In total, 75 responses were received1 during the consultation. Overall, the respondents are supportive of the e-HKD initiative and believe that e-HKD has the potential to make payments more effective while supporting the digital economy. At the same time, the respondents also pointed out the need to further examine issues such as privacy protection, legal considerations, and use cases. Taking into account the findings of the study and the feedback received, the HKMA will start paving the way for possible implementation of e-HKD in the future. A three-rail approach will be adopted:
Mr Eddie Yue, Chief Executive of the HKMA, said, “The two rounds of market consultation have registered widespread support for the e-HKD initiative. We welcome the positive feedback received and agreed with the respondents the need to take a deep dive into issues such as privacy protection and use cases. As Hong Kong’s central banking institution, we will ensure that Hong Kong continues to play a leading role in the global financial landscape by getting ourselves ready as best we can in terms of CBDC and by providing the right soil for growing innovative ideas.”
A summary of the feedback received to the two rounds of market consultation, as well as the HKMA’s response, together with the details of the three-rail approach can be found in the linked paper.
Hong Kong Monetary Authority
20 September 2022