HK Monetary Authority prepares for retail CBDC.

The Hong Kong Monetary Authority (HKMA) has announced plans to start preparing for the implementation of a retail central bank digital currency. The announcement was made in a report published on Friday. Although the HKMA has been considering the development of a digital version of the Hong Kong dollar, known as “e-HKD,” since 2017, recent studies and market consultations have convinced them that it’s necessary to at least start laying the foundation for a possible future implementation of a retail CBDC. The report stated that the HKMA will begin conducting in-depth studies and pilots on the implementation and application of such a currency.

Central banks all over the world are increasingly exploring design options and applications for digital versions of sovereign currencies. The Bank for International Settlements has emphasized the importance of investigating the digitalization of financial systems to maintain stability. The HKMA believes that prospective use cases for e-HKD can quickly emerge out of the rapid evolution of the digital economy.

In April, it was reported that the Hong Kong regulator might develop the e-HKD on a permissioned blockchain and allow private banks to handle implementation. Respondents in HKMA’s study proposed blockchain solutions for the e-HKD. However, the regulator stated in Friday’s report that it will be considering various factors before making a decision and further explore technically feasible solutions on this subject matter.

Read more: Hong Kong’s Central Bank Digital Currency Could Be on Permissioned Blockchain: Source

Edited by Parikshit Mishra.

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