Hong Kong’s regulators joined the People’s Bank of China and other central banks in the Multiple CBDC Bridge initiative to test government digital currencies.
The Hong Kong Monetary Authority (HKMA) closely monitors the development of central bank digital currencies, is actively involved in testing the digital yuan (e-CNY) and digital Hong Kong dollar (e-HKD), and is studying their possible implications for the Hong Kong economy. Forbes edition
reportedthat HKMA is collaborating with the Bank for International Settlements (BIS) Hong Kong Innovation Center to develop e-HKD. The digital Hong Kong dollar will be an analogue of the state currency that can be used for settlements and payments.
The People’s Bank of China (PBOC) has also signed a memorandum of understanding with HKMA, joining an international central bank initiative to explore government digital currencies called the Multiple CBDC Bridge (m-CBDC Bridge). The project participants included the Bank of Thailand and the Central Bank of the United Arab Emirates.
“With the help of the m-CBDC Bridge, we intend to create an environment for central banks to collaborate with the private sector, banks and international corporations to further explore the possibilities of distributed ledger technology. DLT will improve the efficiency of settlements and cross-border payments. Our joint efforts give us confidence that the solutions created through this project will meet the needs of different market players, ”said HKMA Deputy Howard Lee.
The Chairman of the Hong Kong Financial Services Development Council (FSDC) Laurence Li also commented on the initiative. He believes that digital currencies of central banks will become more environmentally friendly and safer than regular money. Considering the anti-counterfeiting polymers used in the production of banknotes, these banknotes are very difficult to recycle.
Government digital currencies also have clear advantages over cryptocurrencies, Lee said. Due to the lack of intrinsic value of digital assets, their high volatility and the large amount of electricity consumed in their production, cryptocurrencies are unlikely to become tools that will be used in everyday economic activities.
Recall that in October, HKMA published a White Paper describing the potential of the digital Hong Kong dollar. In addition, in May, the department announced the successful completion of the first phase of testing the state digital currency.
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