The Hong Kong Financial Authority (HKMA) has issued the primary technical whitepaper addressing its retail central financial institution digital foreign money (CBDC). The whitepaper revolves across the options of the e-HKD.
The HKMA has launched this whitepaper with the collaboration of the BIS Innovation Hub. HKMA expects to develop its preliminary view of the CBDC by mid-2022.
HKMA to Launch a CBDC
This current improvement locations the HKMA nearer in the direction of launching a digital Hong Kong greenback. Earlier than publishing this whitepaper, the HKMA had partnered with different central banks to evaluate the viability of this venture.
One of many our bodies actively concerned in these investigations was the Hong Kong Centre of the BIS Innovation Hub. The 2 establishments got here collectively to research a number of particulars concerning the issuance and distribution of a retail CBDC.
This whitepaper has distinctive options in comparison with different comparable whitepapers. It addresses the technical infrastructure of the CBDC and the way it can ship a monetary resolution. The announcement additional states that an preliminary outlook of the e-HKD will likely be revealed by mid-2020.
The HKMA began its plans for CBDC improvement earlier this yr after launching the “Fintech 2025” roadmap. The primary goal of this roadmap was to supply analysis work on CBDCs.
The Chief Government of HKMA, Eddie Yue, commented on the publication of this whitepaper stating, “The whitepaper marks step one of our technical exploration for the e-HKD. The information gained from this analysis, along with the expertise we acquired from different CBDC initiatives, would assist inform additional consideration and deliberation on the technical design of the e-HKD.”
Thailand and Hong Kong Associate for CBDC Mission
In 2020, the central banks of Hong Kong and Thailand revealed plans to launch a joint CBDC. The venture, which was named “Inthanon-LionRock” would enhance cost effectivity between the 2 international locations.
Nevertheless, on the time, the HKMA didn’t present any curiosity in a CBDC improvement, and as an alternative, it said that its present cost system was extremely environment friendly. Therefore, the nation didn’t want a CBDC to settle monetary transactions.
However, the HKMA recognized present challenges with cross-border funds, which may solely be solved by way of the event of a digital foreign money.
The HKMA didn’t difficulty any exact timeframe relating to the CBDC improvement and when it could be accessible for transactions. Nevertheless, the authority has said that it could proceed working with the joint venture with Thailand and even said that extra international locations could be added to make cross-border transactions extra environment friendly.
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