261
views

Hong Kong Considering CBDC as Part of Fintech Approach

A study from Hong Kong Monetary Authority (HKMA) presents the thoughts and findings on CBDCs during the summer of 2022. Also, the Hong Kong regulators released a whitepaper today. In it, we discover the state is exploring the possibility of a digital Hong Kong dollar (e-HKD).

Hong Kong might be analyzing the potential of a retail-focused central bank digital currency (CBDC) which aims to study the feasibility of e-HKD.

What the Whitepaper Aims to Accomplish

The whitepaper is part of a fintech-experimentation study for the digital Hong Kong dollar (e-HKD). It will scout possible architecture and design options that could help in the infrastructure for distributing e-HKD.

The whitepaper bases its research on a technical and regulatory policy perspective to create a dual-tier system. The first distribution model will focus on a “central bank to issue and redeem CBDC,” while the other for “commercial banks to distribute and circulate either rCBDC or CBDC-backed e-money. The whitepaper will also report the initial thoughts and findings of the research.

In a nutshell, it will traverse common problems like over-issuance prevention, cross-ledger synchronization, privacy-preserving transaction traceability, etc. It will try to counter these problems by examining technological solutions like CBDCs.

HKMA’s CBDC Journey Briefly

Hong Kong began exploring central bank digital currencies in 2017 with the project LionRock. From that time, they have partnered with other central banks in broadening their knowledge of a retail-focused CBDC.

For example, the state began a seven-month collaboration with the Bank of Thailand last year to research the “potential of wholesale CBDC for cross-border payments.”

Soon after, the partnership blossomed into multiple CBDC bridges. Firstly, in February 2021, it was the Central Bank of the United Arab Emirates that emerged. Secondly, the Digital Currency of the People’s Bank of China appeared as a bridge, too.

The digital CBDC will utilize distributed blockchain technology to provide a proof-of-concept model for a unified payments network.

HKMA’s Continued Probe

It announced in June 2021 a financial technology initiative called Fintech 2025. The industry will offer support to central banks in adopting a CBDC, developing a skilled workforce, and including today’s enterprise.

Eddie Yue, chief executive of HKMA, considers the whitepaper as the genesis of their analysis for the e-HKD. He believes that the knowledge they learned from the research would help inform further consideration. Also, it would support deliberation on the technical design of the e-HKD.

Yue also encouraged feedback and suggestions from academia and industry to aid them in enriching their perspectives.

Bitcoin live price
Btc
Bitcoin
$28.861
price
0.30068%
price change
BUY NOW

HKMA’s probe into e-HKD seeks to examine the usefulness and workability of e-HKD, legal and policy considerations

Stay up to date with our latest articles

More posts

India Leads 26 Other Countries in Terms of Play-to-Earn Adoption

According to a recent NFT research, India ranks first among 26 countries on the basis of play-to-earn (P2E) gaming adoption. Indian Players Outnumber Hong Kong's and UAE's As per the survey, approximately 34% of respondents in India have experience with play-to-earn games. To be clear, play-to-earn games are blockchain-based games in which players receive incentives with real-world value. Since the outbreak of the pandemic and the rise of the work-from-home culture in India, the popularity of P2E games has soared.…

Cynthia Lummis Drops Reveal Date for Landmark Crypto Legislation

Senator Cynthia Lummis (R-WY) has given a specific date for when her long-awaited crypto regulator bill will be unveiled. The legislation will help to sort cryptocurrencies under appropriate regulatory labels and federal jurisdictions. According to a tweet from the senator on Friday, the final version of her bill will be released on Tuesday, June 7th. Lummis has spent months working on the bill alongside Senator Kirsten Gillibrand (D-NY), announcing it as early December 2021. The bill will reportedly provide sweeping…

Cardano Founder Lobbies for Favorable Laws in Washington

Cardano Founder Charles Hoskinson has shared details of a week-long trip to Washington D.C, where he met with US lawmakers to discuss crypto-related policies. In a Youtube video, Hoskinson related his conversations which he says are another step towards changing how regulatory entities view the crypto industry. Crypto Policies in Need of Major Work Charles Hoskinson has reportedly spent the past few days mulling over the best course for regulation. In fairness, Hoskinson has always pushed clarity in government interactions…

Terra Holders Approve Proposal to Burn 1B UST from Community Pool

Terraform Labs has announced plans to burn 1.3B UST from the community pool following a successful governance vote. After the "Rebirth of Terra" passed some days ago - the burn proposal is the latest in Terra's ultimate revival plan.  Terra will Absorb the UST Supply On Thursday, the burn idea, proposal 1747, passed with staggering support from the Terra community. 99.3% of participants in the vote (154.579 million) pushed for TFL to destroy a huge part of the UST supply. …

How Can You Determine the Rarity of an NFT?

The rarity of a non-fungible token (NFT) is one of the most often debated topics on the internet. The rarity of an NFT is one of the most critical elements in determining its value. Understanding how rarity works is a significant advantage for anyone investing in the NFT market. How can traders learn to measure this feature for any digital asset? Our guide today will share more insight on this critical aspect. Is It Possible to Measure Rarity? There has…

Twitter Agrees to Pay $150 million Fine for Invading Users’ Privacy

Twitter has consented to pay a $150 million sanction to the US Department of Justice (DOJ) and the Federal Trade Commission (FTC). The payment is a settlement for an invasion of privacy charge by the US government. The complainant maintained that Twitter had released users' private information to help advert companies target customers. The Breach Explained Per a complaint on Thursday, the Social Media behemoth allegedly retrieved customers' cell numbers and email info under false pretenses. According to the charge, …

Most NoCoiners Simply Don’t Understand Bitcoin, Finds Block Study

Jack Dorsey’s financial company Block has unveiled a survey from January examining top reasons that people don’t buy Bitcoin. The top reason, cited by 51% of respondents, was that they simply don’t understand it well enough. Conducted in partnership with Wakefield Research, the study surveyed 9500 people across 14 different countries. Besides the lack of knowledge, other common reasons for avoiding Bitcoin included cybersecurity risks (32%) and price volatility (30%). Among those that refused to buy Bitcoin despite sufficient knowledge,…

Federal Reserve Vice Chair Backs CBDC Issuance, Despite Republican Backlash

Lael Brainard – vice chairwoman of the Federal Reserve – showed support for a US CBDC at the House Financial Services Committee hearing on Thursday. She believes one could bring more efficiency to the financial system, but Republicans are staunchly opposed. Potential Need for a CBDC In advance of the hearing, Brainard issued a written statement discussing the pros and cons of a CBDC in the United States. When framing her argument, she first acknowledged the recent instability of private…

Binance, FTX and Others Pledge Support for Rebirth of Terra

Several of the world’s major exchanges have declared their support for Terraform’s reintroduction of the Terra chain as Terra 2.0. Likewise, participants in the network responded positively to the latest in a string of revival strategies from CEO Kwon Do-Hyeong. Terra Revival Plan Receives the Green Light Algorithmic stablecoin UST’s depegging kicked off a series of events that led to the Terra ecosystem’s record collapse. Although most of the crypto-industry had written off the project, Do-Kwon relentlessly pursued its salvation.…

1inch Integrates With Travala to Allow Travel Bookings With 1INCH Token

The popular DEX aggregator 1inch has entered a partnership with Travala.com to integrate 1INCH token into its platform. Holders will be able to book homes, hotels, airlines, and other activities using the governance token. According to a blog post from 1INCH, the partnership is meant to boost 1INCH token’s adoption and expand awareness of the network. Like other governance tokens, it allows for users to vote on the protocol’s parameters in a relatively decentralized fashion. It also expands its utility…