The director of Hong Kong’s de facto central bank, the Hong Kong Monetary Authority (HKMA), Eddie Yue Wai-Man, said the HKMA will launch a series of trials of its central bank digital currency (CBDC) in testing, the e-HKD, in the fourth quarter this year with banks and technology firms.

See related article: Hong Kong needs at least two years to build wholesale CBDC: HKMA 

Fast facts

  • The trials seek to determine the most suitable use case for the digital Hong Kong dollar, according to a Thursday report from Hong Kong the South Morning China Post (SCMP).
  • Electronic retail payments in Hong Kong are quite well established, Yue said in the interview with SCMP. 
  • “If we want the public to adopt the e-HKD, we need to have a suitable use case that can show that the CBDC is superior or more convenient, or cheaper,” Yue said.
  • Yue expressed doubts about the necessity to launch a retail CBDC in a public consultation in April.
  • HKMA updated the CBDC launching roadmap in September, showing that it plans to first launch a wholesale e-HKD platform for testing and exploring use cases before the final launch to the public.
  • Allowing payments with smart devices like watches, easier cross-border payments, and balance between data privacy and control can be factors to support the Hong Kong retail CBDC, said CEO and managing partner of financial strategy consulting firm Quinlan & Associates, Benjamin Quinlan, in a public post on LinkedIn on Thursday.

See related article: HKMA announces competition to promote CBDCs