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The central bank of Hong Kong has officially published a technical whitepaper to explore the potential of a retail central bank digital currency (CBDC), the digital equivalent of the Hong Kong dollar (e-HKD). The financial institution has also sought feedback from academics as well as the technology industry regarding the same.
Hong Kong Wants to Explore Retail CBDC And Published Technical Whitepaper
On Monday, the Hong Kong Monetary Authority (HKMA) published a 50-page white paper called “e-HKD: A technical perspective” to explore the “potential architectures and design options” for the digital currency.
Like most CBDC research projects, the HKMA emphasized that the digital currency research is only exploratory in nature and wants to seek public consultation prior to a decision being made the mid-next year.
Based on its proposed technical design, the HKMA has sought feedback in seven problem statements which include privacy, interoperability, performance and scalability, cybersecurity, compliance, operational robustness and resilience, and technology-enabled functional capabilities.
Eddie Yue, the CEO of HKMS, said:
“The white paper marks the first step of our technical exploration for the e-HKD,” “The knowledge gained from this research, together with the experience we acquired from other central bank digital currency projects, would help inform further consideration and deliberation on the technical design of the e-HKD.”
HKMA's Research on Digital Currencies Long Continues
The HKMA initially started researching a wholesale CBDC research project in 2017 called LionRock. In 2019, the HKMA and the Bank of Thailand jointly initiated Project InthanonLionRock to study the potential of wholesale CBDC for cross-border payments.
LionRock entered the second phase in 2020 and was later renamed to Multiple CBDC Bridge (mBridge) a year later when it was joined by the Central Bank of the United Arab Emirates and the Digital Currency Institute of the People's Bank of China (PBoC).
Project mBridge is now a collaboration of four central banks and is also supported by the Bank for International Settlements (BIS) Innovation Hub Centre in Hong Kong that aims to use distributed ledger technology to deliver a proof-of-concept model for a unified payments network.