Hong Kong’s central bank begins new phase of its CBDC pilot

The first phase wrapped up in October of last year

March 14, 2024 11:07 am

ADRIAN3388/Shutterstock modified by Blockworks

The Hong Kong Monetary Authority has launched phase two of its e-HKD pilot program.

According to a post on the central bank’s website Thursday, the next phase of the program will see where an e-HKD — Hong Kong’s potential future central bank digital currency — adds value through programmability, atomic settlement and even tokenization.

The second phase will also “explore new use cases that have not been covered in the previous phase.”

“An enhanced e-HKD sandbox, leveraged on the wholesale central bank digital currency (wCBDC) sandbox to be built under Project Ensemble, will support Phase 2 of the e-HKD Pilot Programme to accelerate the prototyping, development and testing of use cases by pilot participants, as well as facilitate the study of interoperability and interbank settlement between e-HKD and other forms of tokenised money,” the central bank said.

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However, it’s still unclear if the HKMA will move forward with a CBDC.

The research, the HKMA said, will continue so that the central bank can see how CBDCs would interact in a “future digital money landscape.”

Organizations can apply to participate in the second phase until mid-May.

“The HKMA will also continue to engage local and international stakeholders regarding the latest development of CBDCs,” the release said.

Last week, Hong Kong unveiled Project Ensemble, which seeks to utilize a sandbox to test out tokenization use cases which could include testing out real-world use cases from carbon credits to treasury management.

At the end of October last year, the HKMA wrapped up phase one of its CBDC pilot. At the time, the project found that the CBDC could “improve customer protections and promote trust” between both businesses and consumers through smart contracts.

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