HKMA Engages in CBDC Projects for Cross-Border Payment Solutions

Hong Kong aims to enhance cross-border payment efficiency by expanding the pilot scope of China’s central bank digital currency (CBDC), e-CNY, according to the latest government budget.

Financial Secretary Paul Chan announced plans to broaden the digital yuan pilot testing to allow more Hong Kong residents to top up their e-CNY wallets through the existing “Faster Payment System” (FPS). FPS is a real-time payment settlement system enabling cross-bank e-wallet payments using recipient mobile numbers or email addresses. The Hong Kong Monetary Authority (HKMA) completed the first-phase pilot of its CBDC, e-HKD, in October 2023, and is gearing up for the second phase.

The HKMA actively participates in the mBridge CBDC project, which is a multi-CBDC platform for wholesale cross-border payments. Hong Kong also issued tokenized green bonds, attracting global institutional investors, and plans to launch a sandbox for stablecoin issuers following a consultation on regulating them. The proposed regulation suggests fiat-referenced stablecoin issuers should obtain a license from the HKMA.

Clever Robot News Desk 1^st March 2024