Hong Kong Central Bank Digital Currency Enters Phases 2

Hong Kong is making considerable development in CBDC as its e-HKD project has recently implemented a 3-rail approach. The respective program is set to move toward its 2nd phase after the efficient accomplishment of the earliest phase that dealt with full-fledged payments. In addition to this, the first phase took into account tokenized deposits, offline payments, and programmable payments.

CBDC Project of Hong Kong Moves into the 2nd Phase Following Positive 1st Phase

Moreover, the settlement of tokenized assets and Web3 transfers was also included in the 1st phase. The e-HKD project’s 3-layered approach includes the development of a foundation layer, iterative enhancements, and industry pilots. The final step of this approach comprises a complete launch. The Hong Kong Monetary Authority started the Central Bank Digital Currency (CBDC) pilot back in November last year.

The initiation of the respective pilot was carried out to explore a CBDC’s feasibility. This is included in the “Fintech 2025” strategy of the city-state. At present, the initial phase of the respective pilot has been completed. The HKMA has asserted that the launch of an e-HKD could provide an advantage to the clients and native enterprises.

The areas to be focused on deal with atomic settlement, tokenization, and programmability. The report regarding the project points out that the upcoming phase will develop on the triumph of the first phase. As per the report, the next phase will attempt to delve into the latest use cases concerning an e-HKD. While moving on, the project will deal with the use cases that the initial phase identified in terms of great potential.

The 3-Layered Approach of the Program Lets It to Offer Scalability and Interoperability

The program is paving the way for the utilization of distributed ledger technology. The e-HKD project’s 3-layered approach signifies the systematic and gradual progress of the project. This would also be effective in minimizing the likely vulnerabilities. The distributed ledger technology’s use will enable the project to leverage scalability and interoperability-related capabilities.

In the 2nd phase, the stakeholders will provide input for the project in both private and public sectors. With this, the project can govern the viability of these sides. In the meantime, the HKMA is making continuous efforts concerning a few aspects of the 1st layer. They include the technical and legal basis for the launch and implementation of a central bank digital currency (CBDC).

The HKMA mutually started the multiple CBDC Bridge programs in collaboration with the Bank for International Settlements-based Innovation Hub. The respective partnership took place back in the year 2021.The other parties engaged in this partnership include central banks in the United Arab Emirates, Thailand, and China.

The CBDC Project Focuses on Enabling Transparent, Cheaper, and Rapid Payments across the Borders

The respective project has the chief objective of exploring solutions dealing with transparent, cheaper, and rapid CBDC payments across borders. Eddie Yue, the chief executive officer of the HKMA, pointed out in September that mBridge intended to commercialize and broaden. For this purpose, he added, onboarding of the latest banking participants plays a significant role.

According to Yue, the respective people will come from the United Arab Emirates, Thailand, and Hong Kong. The executive moved on to say that the agency is thrilled to receive some fellow central banks in the open forum. He also stated that the organization will shortly introduce a minimum viable product. While doing so, Yue added, the HKMA’s target would be to enable mBridge’s gradual commercialization.

Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.