The Hong Kong Monetary Authority (HKMA), the de facto central banking authority in the Hong Kong Special Administrative Region, revealed its “Fintech 2025 Strategy” in a press conference on Tuesday. HKMA announced a high-level strategy for driving financial technology development in the city. As part of the fintech strategy, the HKMA said it’s expanding its research and development efforts on digital currency.
HKMA to expand its research on retail CBDC.
The HKMA said it’s expanding its research and development efforts on central bank digital currencies (CBDC) from previously just wholesale to potentially something that could be retail facing, similar to the digital yuan across the border in mainland China. “In addition to the continued effort on wholesale CBDCs, the HKMA has been working with the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre to research retail CBDCs. The financial authority will begin a study on e-HKD to understand its use cases, benefits, and related risks,” the HKMA announced in a press conference summary online.
CBDC will be one of the five priorities under the high-level strategy.
Though the Fintech 2025 plan details are not yet fully available, it is clear that CBDC will be one of the five priorities under the high-level strategy. This is the first time that the HKMA has expressed its intention to study the potentials of the e-HKD in a retail use case scenario. It also comes amid ongoing internal tests of the e-CNY in Hong Kong to facilitate cross-border payment for Hong Kong and mainland China residents. “The HKMA will also continue to collaborate with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong,” the central banking authority added.