Howard Lee, deputy head of the Hong Kong Monetary Authority (HKMA), said that the regulator is considering the possibility of issuing digital currency available to private banks and firms.
As part of the Aurum project, a national digital currency can be created with which payments will be made. At the same time, it will be distributed through commercial banks and payment systems. At the moment, the regulator is considering all the advantages and disadvantages of such a currency and the issue of launching a state cryptocurrency has not yet been resolved.
“We are currently considering two architectural models – a hybrid government cryptocurrency and private stablecoins based on the national currency,” Lee said during a speech at the Bank for International Settlements (BIS) summit.
The principle of a hybrid digital currency is that it is issued exclusively by the Central Bank of the country, and payments with this currency can be made by banks and other intermediaries. That is, it is analogous to fiat currency. The principle of the second model is that the Central Bank of the country is fully responsible for the digital currency and controls its reserves, and banks issue their own stablecoins pegged to this digital currency.
“Developing your own digital currency requires balancing many aspects – from consumer needs to political requirements and technical considerations, not to mention the various potential risks. There are often difficult trade-offs to make. In addition, we are working with the People’s Bank of China to test the digital yuan for international retail payments in Hong Kong, ”said Howard Lee.
In September last year, it was reported that the company ConsenSys will help the Hong Kong authorities in the study of the state cryptocurrency.
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