After initiating the e-HKD Pilot Programme on 18 May 2023, the Hong Kong Monetary Authority (HKMA) commenced Phase 2 on 23 September 2024, renaming the project "Project e-HKD+". The new project name reflects the evolving fintech landscape and a deeper dive into innovative use cases for publicly and privately issued digital money. While Phase 1 focused on retail central bank digital currency, Phase 2 expands the project coverage to a more comprehensive exploration of the digital money ecosystem.
Objective of Phase 2
The outcome of Phase 2 will help HKMA understand the practical issues in designing, implementing and operating a digital money ecosystem for both publicly and privately issued digital moneys.
Phase 2 Period
HKMA will work closely with the participating institutions in the next 12 months, with the aim of sharing the key learnings from Phase 2 with the public by the end of 2025. An e-HKD sandbox will be made available to pilot participants to accelerate their prototyping, development and testing of use cases.
Main Themes of Phase 2
Under Phase 2, 11 groups of firms from various sectors have been selected to explore innovative use cases for e-HKD and tokenised deposits within a real-world setting across three main themes:
- settlement of tokenised assets
- programmability
- offline payments
Settlement of Tokenised Assets
The use cases will test the commercial value of settling a tokenised fund using digital money on a public blockchain, operational security and protocols on public DLT and privacy implications, bank customers' use, and the interbank settlement environment.
Programmability
The use cases will test the e-HKD infrastructure and blockchain network for smart contracts, and explore the use of digital money for reward platform and domestic and international trade finance.
Offline Payments
The use cases will test the use of e-HKD stored in mobile SIM card or anonymous e-HKD wallet for offline payments or transfers.
Selected Participants
The selected groups of participants include banks, card scheme operators, fund issuers and technology providers.
e-HKD Industry Forum
The HKMA will establish the e-HKD Industry Forum to provide a collaborative platform for participating institutions to discuss common issues and further explore the possible implementation and adoption of new forms of digital money in a scalable manner. Under the Forum, industry-led working groups will be established to make recommendations on specific topics, with an initial focus on issues related to programmability.
Links to HKMA Press Releases
Hong Kong Monetary Authority - HKMA commences Phase 2 of e-HKD Pilot Programme and expands Project e-HKD to explore new forms of digital money (23 September 2024)
Hong Kong Monetary Authority - Commencement of the e-HKD Pilot Programme (hkma.gov.hk) (18 May 2023)
Hong Kong Monetary Authority - HKMA's policy stance on e-HKD (20 September 2022)
Link to Previous Legal Update
HKMA Commences e-HKD Pilot Programme
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