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The Hong Kong Monetary Authority (HKMA) has published a paper outlining the current state of research on the proposed Retail Central Bank Digital Currency (rCBDC) and plans for its further development. This is his third paper published by HKMA on the proposed e-HKD called CBDC.
The proposed rCBDC is Have Two-tier structure of wholesale interbank system and retail user wallet system. A wholesale Hong Kong CBDC has yet to be introduced, but research began in 2017, four years before the rCBDC plan was launched. rCBDC is not mediated. The paper states:
Even though e-HKD does not appear to have an immediate role in the current retail payments market, we believe that promising use cases for e-HKD will emerge soon from the rapid evolution, or revolution, of the digital economy. .”
One of the use cases under consideration is the use of CBDC as an on-ramp and off-ramp vehicle. [decentralized finance, or] Defy.
The start date was not targeted in the paper, but the local press report Testing of rCBDC could begin in the fourth quarter of this year.
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Most of the papers were devoted to responding to previous papers, one of which was a request for comments on technical aspects of rCBDC and another one dealing with policy and design. Between them, the paper received 75 responses from interested parties.
Most of the technical commenters preferred that privacy and cybersecurity take precedence over efficiency. There was a wide range of opinions about performance and scalability.
Offline and cross-border payments, and interoperability with existing payment systems were the main concerns expressed regarding the design. Interoperability with mainland China’s e-CNY CBDC, which is currently in pilot phase, was of particular note.
