The Digital Currency Institute's First Pilot Program has launched, How Will the Hong Kong Monetary Authority Lead Digital Currency Innovation?

On 23 September, the Hong Kong Monetary Authority (HKMA) launched the second phase of the "e-HKD" Proof-of-Concept project to further explore innovative use cases for new digital currencies (including e-HKD and tokenised deposits) that individuals and enterprises can use. As the research of the "e-HKD" project expands from e-HKD to a more comprehensive exploration of the digital currency ecosystem, the project has been renamed "e-HKD+", reflecting HKMA's close attention to the new trends in financial technology and the full potential of digital currencies. The Proof-of-Concept for e-HKD is an important part of the "e-HKD+" project. 11 selected institutions from different industries will explore innovative use cases for e-HKD and tokenised deposits in three main themes in the second phase, including tokenised asset settlement, programmability, and offline payments. The selected institutions will also study the commercial feasibility of new digital currencies for individuals and enterprises in practical scenarios. The results of the second phase will help the HKMA understand the practical issues that may arise in the design, implementation, and operation of a digital currency ecosystem coexisting with the public and private sectors. The "e-HKD+" project will continue to advance the technical and legal foundations necessary for the potential issuance of e-HKD for individuals and enterprises in the future. The HKMA will also establish an industry forum for e-HKD to provide a cooperative platform for participating institutions to discuss common issues and deeply explore the possibility of implementing and applying new digital currencies on a larger scale. The forum will have industry-led working groups that will provide recommendations on specific topics, initially focusing on programmability-related issues. Similar to the first phase, the HKMA will provide a sandbox for participating institutions in the Proof-of-Concept to accelerate the design, development, and testing of their potential use cases. The HKMA will work closely with the selected institutions for approximately 12 months in the future, collectively advancing the work of the second phase, and plans to share the main achievements of the second phase with the public by the end of 2025. Eddie Yue, Chief Executive of the HKMA, stated that the "e-HKD+" project showcases HKMA's commitment to promoting innovative development of digital currencies. The Proof-of-Concept for e-HKD has provided HKMA with a valuable opportunity to explore with the industry how new digital currencies can bring unique value to the public. They will continue to research digital currencies in a use case-based manner and look forward to collaborating closely with industry participants in the second phase to create different innovative use cases.