Hong Kong Monetary Authority Releases Digital Hong Kong Dollar (e-HKD) Technical White Paper
Recently, the Hong Kong Monetary Authority released a technical white paper (white paper) entitled “e-HKD: A technical perspective” on the central bank’s digital currency at the retail level.
According to the mobile payment network, the Monetary Authority announced the “FinTech 2025” strategy in June this year, which includes strengthening research on the central bank’s digital currency, so that Hong Kong can be fully prepared for related future development. In addition to continuing and expanding cooperation with other central banks to study the cross-border application of central bank digital currencies at the wholesale level, the HKMA has also begun research to explore the issue of retail-level central bank digital currencies (ie “digital Hong Kong dollars” or e-HKD) in Hong Kong. Feasibility, including technical and policy factors will be considered, and hope to put forward preliminary ideas in the middle of next year.
After the announcement of the “FinTech 2025” strategy, Hong Kong Monetary Authority President Yu Weiwen once stated that he would explore retail Hong Kong dollar digital currencies and would continue to cooperate with the People’s Bank of China to conduct technical tests on the digital renminbi in Hong Kong. In an in-depth explanation of the “FinTech 2025” strategy, he stated that specific advances will be made from five aspects: comprehensively promote bank digitization, increase central bank digital currency research, play to the potential of data infrastructure, expand the financial technology talent pool, and use resource policies to support development.
In terms of increasing the central bank’s digital currency research, Yu Weiwen said that the Hong Kong Monetary Authority will conduct in-depth research to strengthen preparations for the issuance of central bank digital currencies at the wholesale and retail levels in Hong Kong. The release of the white paper is just part of the results of technical research.
The white paper is based on the retail-level central bank digital currency model jointly researched by the HKMA and the Hong Kong Center under the Innovation Hub of the Bank for International Settlements, and explores potential technical solutions to issue and distribute retail-level central bank digital currency.
The design proposed in this white paper is the first technical framework proposed by the central bank that has a breakthrough arrangement in terms of privacy protection, which can track transactions while protecting privacy. In the process of research, the HKMA summarized a number of issues that need to be further explored in the white paper, and will invite academia and industry to provide further opinions.
Yu Weiwen said: “The release of the white paper marks the first step taken by the HKMA on the technical exploration of the “digital Hong Kong dollar”. The knowledge we have gained from this research, together with the experience gained from other central bank digital currency research projects, will It will help us to further think about and explore the technical design of the “digital Hong Kong dollar”. We look forward to comments and suggestions from academia and industry to enrich our views.”
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