The Hong Kong Monetary Authority announced the launch of the second phase of the pilot of its CBDC, the digital Hong Kong dollar (e-HKD). This new phase will focus on furthering the research on already examined use cases for the currency, including programmability and tokenization, and adding new, not previously explored use cases.
Hong Kong Launches Second Phase of Its CBDC Pilot Program
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Hong Kong Monetary Authority to Launch CBDC Pilot’s Second Phase
Hong Kong seeks to advance its prospective central bank digital currency ( CBDC) capabilities. The Hong Kong Monetary Authority (HKMA) announced on March 14 the launch of the second phase of its Hong Kong dollar pilot program. The institution remarked that this new phase would extend the base laid by its first CBDC pilot phase, which ended on September 2023 and delved into several functionalities of a smart currency, including tokenization and programmability.
For this second phase, the HKMA seeks to “delve deeper” into these use cases, and explore new ones not previously considered. Also, the pilot will establish a new sandbox, supported by the wholesale CBDC-focused Project Ensemble’s sandbox, to “facilitate the study of interoperability and interbank settlement between e-HKD and other forms of tokenized money.”
The experiences derived from these first two experimental pilot phases, and the results of the Project Ensemble initiative, will be used to expedite a study for the possible implementation of a CBDC. Furthermore, these could be useful for “exploring the roles central bank digital currencies ( CBDCs) could play in a future digital money landscape,” the HKMA stressed.
The HKMA has been expanding its experimentation with CBDC modernization and digital money. In the 2024-2025 city’s budget presentation, Financial Secretary Paul Chan disclosed that the city planned to expand its Web3 and digital yuan initiatives further during this period.
Recently, the HKMA announced the launch of a stablecoin sandbox to allow interested institutions to test the issuance of these stablecoins according to the guidance and rules proposed by the organization.
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