Hong Kong Financial Authority Releases CBDC Whitepaper to Find out about Prospect of e-HKD

Hong Kong’s Financial Authority, its de facto central financial institution, has launched a whitepaper on retail central financial institution virtual currencies (CBDCs) whilst it continues to discover the potential for a virtual Hong Kong greenback (e-HKD) for its home and cross-border markets.

The white paper was once printed Monday by means of the Hong Kong Financial Authority (HKMA), which is the de-facto central financial institution of town who’s professional name is the Hong Kong Particular Management of the Other folks’s Republic of China.“

Underneath the “One Nation, Two Methods” framework underneath which Hong Kong is ruled, Hong Kong maintains its personal monetary and judicial techniques, amongst others, one by one from the Chinese language mainland.

The paper, titled “e-HKD: A technical point of view,” explores doable architectures and design choices because it pertains to the development of the infrastructure for distributing e-HKD.

“The information received from this analysis, along side the enjoy we received from different CBDC initiatives, would assist tell additional attention and deliberation at the technical design of the e-HKD,” HKMA Leader Government Eddie Yue stated in a press free up on Monday.

The financial institution stated its whitepaper is “the primary” amongst an identical papers printed by means of central banks that main points transaction traceability whilst keeping privateness as a key technical function.

“The structure proposed on this whitepaper is maximum notable for its skill to flexibly and successfully instantiate other two-tier distribution fashions of rCBDC whilst attaining breakthroughs in privacy-preserving transaction traceability and cross-ledger synchronization of decoupled ledgers,” the authority stated in its paper.

HKMA’s analysis consisted of 7 primary spaces of outrage which analyzed the advantages and shortcomings of CBDCs as they observe to privateness, interoperability, scalability and function, cybersecurity, compliance, operational robustness and resilience in addition to their technology-enabled purposeful functions.

Underneath Challenge LionRock in 2017, the HKMA started researching CBDCs and says it has since “actively collaborated” with different central banks in broadening its wisdom of wholesale CBDCs.

The paper additionally tested 4 primary distribution fashions together with a “variant of direct CBDC type,” a “hybrid type,” an “intermediated type,” and “CBDC-backed e-money.”

The financial institution stated it is looking for evaluations from instructional and business mavens by means of 12 months’s finish underneath a proper request for a remark report. HKMA additionally underscored its intent at the back of its analysis was once to assemble perspectives, to not push forward with infrastructure building at this level.

“It must be famous that the proposed structure isn’t a blueprint for e-HKD, nor does it method a choice at the CBDC distribution fashions selected for enforcing e-HKD”, the financial institution stated. “Tips and concepts of higher designs also are solicited.”

Learn extra: BIS and Hong Kong Financial Authority to Experiment With Tokenized Inexperienced Bonds


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