Revealing the fintech strategy through a release published on Tuesday, CBDCs will reportedly play a role in the city administration’s intention of promoting comprehensive digital finance enactment by 2025.
Concerning its proposals for central bank digital currencies, the HKMA announced that it would expand its research efforts. It will secure Hong Kong’s eagerness to float retail and wholesale CBDCs.
As stated in the announcement, the HKMA collaborates with the Bank for International Settlement to research a retail digital Hong Kong dollar currency. This research is reportedly weighing risks, benefits, and potential use examples of an e-HKD currency.
The HKMA also said that it would proceed to operate with China’s central bank on cross-border utilization of the latter’s digital currency electronic payment (DCEP) scheme.
Admittedly, it was reported that Hong Kong was attending to develop pilot studies for the PBoC’s digital yuan back in May.
Meantime, the HKMA is also a member of a consortium of Asian central banks. It is operating on a multiple central bank digital currency bridge. The project develops a similar collaboration within Hong Kong and Thailand to build cross-border CBDCs based on decentralized ledger technology.
The extended CBDC research plan is one of five major center points in Hong Kong’s fintech strategy. Other areas involve securing the city’s banks. It will help embrace digital finance technology while producing a robust data infrastructure to help the planned fintech expansion.
Hong Kong also desires to support its overall fintech overhaul with government-led policies. Meanwhile, it also set the groundwork to produce an experienced workforce for the new digital finance paradigm.
Against the backdrop of its increased fintech focus, Hong Kong will also limit access to cryptocurrencies.
The city’s Financial Services and Treasury Bureau published a policy offer back in May. It was calling for the government to curb crypto trading to qualified investors with portfolios meriting at least $1 million.