Regulator seeks feedback on benefits, pitfalls of e-HKD
The Hong Kong Monetary Authority (HKMA) is turning to the financial markets for input on the design and policy issues surrounding the so-called e-HKD, as it evaluates a digital currency.
The HKMA is now asking industry leaders and consumers for additional feedback on the potential benefits and pitfalls of creating a digital form of the local dollar, in a follow-up to a technical white paper published in October.
The issues include privacy concerns surrounding efforts to prevent illegal activities.
“The policy and design considerations set out in the paper have reflected [the] latest international developments as well as the unique features of the financial market of Hong Kong,” chief executive Eddie Yue Wai-man said in a statement.
“The comments received would help us formulate the strategy for best positioning our financial market” in the area.
The public consultation will end on May 27. The authority stressed it had not yet made a decision about e-HKD and would remain “open-minded” in considering any issues raised by the public.
The HKMA has been examining central bank digital currencies since 2017, and announced a project in June last year to explore e-HKD as part of its Fintech 2025 plan.
The decision followed similar moves by other global central banks to advance their own digital currencies amid the growth of e-commerce and technological breakthroughs.
The People’s Bank of China (PBOC) has been running pilot programmes for a digital yuan or e-CNY for several years in nearly a dozen mainland cities and at several Winter Olympics venues in Beijing in February. The trials were being expanded, the central bank said earlier this month.
According to the PBOC, the digital yuan had 261 million users in December, nearly double the number in October.
The HKMA in February said it was preparing to roll out a pilot programme for e-CNY in Hong Kong, making it the first location to use the digital currency outside the mainland.
In its latest consultation exercise, the HKMA is asking the public for input on 12 questions surrounding e-HKD, such as privacy issues and bank funding. It is also seeking views on potential vulnerabilities in the city’s payment system to cyberattacks and power outages if the digital currency were adopted.