financemagnates.com
The Hong Kong Monetary Authority (HKMA) announced on Tuesday its plans to study a central bank digital currency (CBDC) that will be focused on local and retail usage.
In a press conference, the monetary regulatory of the autonomous regions elaborated its ‘Fintech 2025 Strategy’ and the prospect of the CBDC is a part of its high-level strategy.
The HKMA was already vocal about its efforts on the future prospects of central bank-issued digital currencies, but those were confined to wholesale usage. Now, the shift to retail-focused digital currency puts the regulator in line with its mainland counterpart.
“In addition to the continued effort on wholesale CBDCs, the HKMA has been working with the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre to research retail CBDCs and will begin a study on e-HKD to understand its use cases, benefits, and related risks,” the HKMA stated in the press briefing.
Fintech Is the Focus
Apart from the efforts towards CBDC, the central bank also wants all lenders to become fintech, creating the ‘next-generation data infrastructure, expanding the fintech-savvy workforce, and nurturing the ecosystem with funding and policies.
The Hong Kong monetary regulator was already working on CBDCs with its Thai counterpart to utilize the digital currency in cross-border payments between the two countries. Other central banks also joined the project as it went into its second phase last February.
The HKMA’s interest in retail CBDC became prominent as last year it showed interest in testing digital yuan in the autonomous territory.
“The HKMA will also continue to collaborate with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong with a view to providing a convenient means of cross-boundary payments for both domestic and mainland residents,” the regulator added.