Hong Kong includes central bank digital currency in fintech strategy
Hong Kong Monetary Authority (HKMA) has published its Fintech 2025 strategy with central bank digital currencies (CBDC) included in the digital finance innovation package.
CBDCs will reportedly play a part in the city administration’s goal of promoting comprehensive digital finance adoption by 2025, according to the release.
The HKMA revealed that it would reportedly increase its research efforts to ensure Hong Kong’s readiness to float both retail and wholesale CBDCs.
The authority is collaborating with the Bank for International Settlement to research a retail digital Hong Kong dollar currency. This research is reportedly examining risks, benefits, and potential use cases of an e-HKD currency. The research plan is one of five major focus points in Hong Kong’s fintech strategy.
The HKMA said that it will continue to work with China’s central bank on cross-border utilization of the latter’s digital currency electronic payment (DCEP) project. As being a part of a consortium of Asian central banks, it is working on a multiple central bank digital currency bridge. The project builds upon a similar collaboration between Hong Kong and Thailand to create cross-border CBDCs based on decentralized ledger technology.
Hong Kong wants to support its comprehensive fintech overhaul with government-led policies while also wants to develop a skilled workforce for the new digital finance paradigm.
While in the backdrop of its expanded fintech focus, Hong Kong is also moving to restrict access to cryptocurrencies.
Financial Services and Treasury Bureau of the city has issued a policy proposal back in May calling for the government to restrict crypto trading to qualified investors with portfolios worth at least $1 million.