HKMA: Hong Kong to explore issuing digital Hong Kong dollar, will work with PBoC on digital RMB

Hong Kong will explore issuing digital Hong Kong dollars, HKMA Vice President Lee Tat Chee said at a press conference.

HKMA: Hong Kong to explore issuing digital Hong Kong dollar, will work with PBoC on digital RMB

Hong Kong will explore the issuance of digital Hong Kong dollar, said HKMA Vice President Lee Tat Chee, at a press conference. The HKMA announced its “FinTech 2025” strategy, which proposes that the HKMA will conduct in-depth studies to strengthen Hong Kong’s preparations for issuing digital Hong Kong dollars at the wholesale and retail levels. The HKMA will also continue to work with the People’s Bank of China to conduct technical tests on digital renminbi (e-CNY) in Hong Kong to provide convenient cross-border payment services for Hong Kong and Mainland residents.

Full text as follows.  

  June 08, 2021

  HKMA announces ‘FinTech 2025’ strategy

  The Hong Kong Monetary Authority (HKMA) today (8 June 2021) announced its ‘FinTech 2025’ strategy to promote the development of financial technology in Hong Kong.

  In his opening remarks at the Financial Technology Symposium organised by the Hong Kong Association of Banks, Mr Raymond Yu, Chief Executive of the HKMA, outlined the ‘FinTech 2025’ Strategy. The strategy aims to encourage the financial industry to fully adopt FinTech by 2025 and provide rational and efficient financial services that benefit the people of Hong Kong and the economy as a whole. The five main areas of the strategy are

  1. Full roll-out of banking digitization

  The ‘Smart Banking’ New Era Strategy, announced in 2017, establishes a solid foundation for the application of FinTech, and the HKMA will continue to support banks to apply FinTech across the full spectrum of their business operational processes. To this end, the HKMA will launch a FinTech Adoption Assessment to review banks’ current and future adoption of FinTech in the coming years, and identify areas of FinTech business or specific types of technology that are not widely adopted and require assistance from the HKMA. The HKMA will continue to issue more supervisory guidelines to facilitate the adoption of innovative technology by banks and will take a proactive role in digitizing the banking supervisory process through advanced technology.

  2. Intensify the study on digital currency for the central bank

  The HKMA will conduct in-depth research to enhance the preparation for the issuance of a central bank digital currency at both wholesale and retail levels in Hong Kong. In addition to continuing its efforts to study central bank digital money at the wholesale level, the HKMA is working with the Hong Kong Centre of the Bank for International Settlements Innovation Hub to study central bank digital money at the retail level, and will later commence a study of local retail Hong Kong dollar digital money (e-HKD) to explore its use cases, benefits and associated risks. The HKMA will also continue to work with the People’s Bank of China to conduct technical tests on digital RMB (e-CNY) in Hong Kong to provide convenient cross-border payment services for Hong Kong and Mainland residents.

  3. Harnessing the potential of data infrastructure

  To realize the full potential of the new generation of Hong Kong’s banking industry, the HKMA will take the lead in upgrading Hong Kong’s existing data infrastructure and establishing new ones, including ‘Business Data Access’, an enterprise version of ‘Smart Convenience’ and a ‘Blockchain Shared Credit Information Platform’ to facilitate data sharing with the consent of data owners.

  4. Expanding the FinTech talent pool

  To increase the supply of fintech talent, the HKMA plans to work with a number of strategic partners to launch a number of initiatives to nurture more students and bankers to become well-rounded fintech professionals. Initiatives include the development of a fintech training curriculum and qualifications framework, and the promotion of collaborative projects between industry and academia, such as the ‘Fintech Pioneer Network’ programme, which will be launched on a pilot basis in September this year to provide internship opportunities for postgraduate students to participate in banks’ fintech projects and to research federated learning and other artificial intelligence technologies.

  5. Leveraging resources and policies to support development

  The HKMA will work with key industry stakeholders to set up a ‘FinTech Cross-Sectoral Coordination Group’ to formulate favourable policies to support the development of the FinTech ecosystem in Hong Kong. In addition, the HKMA will continue to prepare the ‘Hong Kong Growth Portfolio’ to strengthen Hong Kong’s position as a center for finance, commerce and innovation. The HKMA will also enhance the ‘FinTech Regulatory Sandbox’ to explore the feasibility of providing funding for eligible FinTech projects and is discussing this with the Innovation and Technology Commission.

  Mr Yu said: ‘The HKMA is convinced that FinTech will be a major engine of growth for the financial sector in the post-epidemic era, and there is no better time than now to step up the development of FinTech to take full advantage of these opportunities. “FinTech 2025” articulates the HKMA’s vision for development. I urge all stakeholders to work with the HKMA to take Hong Kong’s fintech ecosystem to another level.’

  The HKMA will announce further details of the initiatives under the ‘FinTech 2025’ strategy in due course.

  Hong Kong Monetary Authority

  June 8, 2021

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