The Hong Kong Monetary Authority (HKMA) plans to start trials of its central bank digital currency (CBDC) in the fourth quarter, the South China Morning Post (SCMP) reported Tuesday, citing a media briefing.
Hong Kong’s de facto central bank now plans to lay the technology and legal foundations to support the development of “e-HKD” while exploring the use cases and design issues related the digital currency by conducting a series of tests.
HKMA issued a discussion paper in April inviting views on key issues surrounding CBDCs. It received 75 responses from industry bodies, fintech firms, financial institutions and tech companies.
“Overall, the respondents are supportive of the e-HKD initiative and believe that e-HKD has the potential to make payments more effective while supporting the digital economy,” the HKMA said on Tuesday.
“At the same time, the respondents also pointed out the need to further examine issues such as privacy protection, legal considerations and use cases.”
The central banks of almost every major economy worldwide are studying or developing CBDCs, partly to safeguard their currencies from potential threats posed by privately issued digital currencies.
China is leading the way with its “e-CNY,” which had 260 million individual users as of January, with testing set to extend to four of the country’s largest provinces in the near future.
Hong Kong has its own financial and judicial systems, separate from the Chinese mainland as part of the “One Country, Two Systems” framework under which Hong Kong is governed.