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Hong Kong Monetary Authority explores digital currency

Hong Kong Monetary Authority (HKMA) is carrying out proof of concept work on a central bank digital currency with R3, Hong Kong Interbank Clearing (in which it has an ownership stake) and several undisclosed banks.

According to a paper, providing an update on the local FinTech landscape and measures to support the development of the sector, “the first phase of the research, which explores the feasibility of [central bank-issued digital currency] in performing domestic inter-bank payments, inter-corporate payment in the wholesale market and delivery versus payment (DvP) debt securities settlement, is expected to be completed in the fourth quarter of this year. Subject to the findings of the first phase, HKMA will map out the next steps.”

It isn’t the first central bank to go down this route; there have been similar initiatives recently launched by the likes of Canada, Singapore and the UK.

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