The Hong Kong Financial Authority (HKMA) has at the moment released an official whitepaper exploring the potential of a retail-focused central financial institution digital foreign money (CBDC), the digital Hong Kong greenback (e-HKD).

Based on the doc, the HKMA will search to grasp the “potential architectures and design choices” from a technical and regulatory coverage perspective, with the ambition of making a dual-tier system — the primary being designed for a “central financial institution to problem and redeem CBDC,” and the second being retail-centric for “business banks to distribute and flow into both rCBDC or CBDC-backed e-money.”

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Hong Kong debuted their investigation into CBDC’s in 2017 with Challenge LionRock and in early 2020 launched into a seven-month collaboration with the Bank of Thailand  prospecting the “potential of wholesale CBDC for cross-border funds.”

The initiative quickly evolved into Multiple CBDC Bridge in February 2021 following the introduction of the Central Financial institution of the United Arab Emirates and the Digital Foreign money Institute of the Individuals’s Financial institution of China. This “m-CDBC” will purpose to make use of distributed ledger expertise to ship a proof-of-concept mannequin for a unified funds community.

In June of this yr, the HKMA announced Fintech 2025, a monetary expertise initiative targeted on 5 areas of innovation together with providing help to central banks within the adoption of a CBDC, creating a talented workforce, in addition to the initiative launched at the moment. HKMA chief government of the HKMA Eddie Yue stated:

“The Whitepaper marks step one of our technical exploration for the e-HKD. The data gained from this analysis, along with the expertise we acquired from different CBDC tasks, would assist inform additional consideration and deliberation on the technical design of the e-HKD.

Related: CBDCs can cut cross border remittance costs by half: BIS report

“We additionally look ahead to receiving suggestions and solutions from the academia and business to complement our views,” Yue added.

Regardless of issuing a blanket ban on all crypto-related activities alongside Hong Kong, The Individuals’s Republic of China has been persistently bold of their pursuit of a CBDC, establishing themselves as a distinguished chief within the burgeoning international market.