The Hong Kong Monetary Authority (HKMA) has launched the second phase of its digital Hong Kong dollar (e-HKD) pilot project.
This initiative, Project e-HKD, includes collaboration with 21 financial institutions to explore 11 different use cases across three key areas: the settlement of tokenized assets, programmability, and offline payment solutions.
To promote collaboration, the HKMA will establish the e-HKD Industry Forum, serving as a platform for institutions to address common challenges. Furthermore, several industry-led working groups will be formed to provide recommendations on targeted issues.
Notable use cases include one centered around the settlement of a tokenized fund, involving Hang Seng Bank, Aptos Lab, and Boston Consulting Group. Another use case features a consortium with Visa, ANZ, Fidelity, and ChinaAMC aiming to enhance real-time settlement for interbank transfers and cross-border payments.
According to HKMA chief executive Eddie Yue, this second phase is expected to last approximately one year. Yue emphasized, “The e-HKD Pilot Programme has offered a crucial opportunity for the HKMA to engage with the industry on how new digital monetary forms can deliver unique benefits to the public. We will continue to take a use-case driven approach in our exploration of digital currency and look forward to partnering with industry participants during Phase 2 to develop various innovative scenarios.”
Additionally, HKMA has opened applications for its Gen AI sandbox—a project introduced in August in collaboration with the state-owned tech firm, Cyberport. This sandbox will enable authorized institutions to experiment with their AI prototypes in a regulated environment, alongside guidance from HKMA and access to Cyberport’s infrastructure.
For those interested in the intersection of artificial intelligence and banking, the first NextGenAI conference hosted by Finextra will be held on November 26, 2024. You can learn about the challenges and opportunities AI presents in the banking sector by registering your interest here.