‘New Phase of CBDC Testing Begins in Hong Kong’

The Hong Kong Monetary Authority (HKMA) has officially launched the second phase of its central bank digital currency (CBDC) pilot, known as the e-HKD, as announced on Thursday.

Building on the progress made during the first phase, the central bank will continue to test the use of a digital version of the Hong Kong dollar in various applications. Phase 1 of the pilot program focused on testing the CBDC in domestic retail payments, offline payments, and settlement of tokenized assets.

In the upcoming phase, the HKMA aims to further explore specific pilot projects that demonstrate the unique value of an e-HKD, including programmability, tokenization, and atomic settlement. Additionally, new use cases that were not covered in the initial phase will be investigated.

Earlier in the month, the HKMA initiated a regulatory sandbox project to evaluate the use of CBDCs for wholesale transactions and tokenization. This project is expected to support Phase 2 of the e-HKD pilot.

Hong Kong is just one of over 100 jurisdictions globally that are exploring the issuance and potential applications of CBDCs. Some regulators believe that central bank-backed digital currencies can offer a trustworthy alternative to payment-focused private cryptocurrencies like stablecoins.

Interested organizations have until May 17 to apply to participate in the pilot program, according to the announcement.