Retail CBDC Could Add Unique Value, but Further Investigation Is Needed, Hong Kong Central Bank Says

Hong Kong has not decided whether to introduce an e-HKD, the report said.

AccessTimeIconOct 30, 2023 at 12:23 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now
  • Hong Kong’s Monetary Authority has published a report on phase 1 of its CBDC pilot.
  • The report said an e-HKD could add unique value to the payments ecosystem, but further investigation is needed.

A retail central bank digital currency (CBDC) could add value to the payments ecosystem and enable new types of economic transactions, but further investigation and evaluation are required to determine large-scale and real-life applications, the Hong Kong Monetary Authority said.

The authority has not decided whether to introduce a digital Hong Kong dollar, or e-HKD, according to a report published after phase 1 of a pilot program. But Hong Kong's ambitions to become a virtual-asset hub have been apparent ever since it implemented a new regulatory regime in June. It granted the first set of licenses for crypto trading platforms in August. The HKMA embarked on the feasibility study known as Project e-HKD in 2021.

The report said the pilot found that an e-HKD could add value in three main areas – programmability, tokenization and atomic settlement – with the potential to facilitate faster, more cost-efficient and more inclusive transactions. However, the program's 14 pilots with 16 participating firms were conducted on a small scale under a controlled environment, the report said.

"The potential and prerequisites for realising such unique value at scale to substantiate the issuance of an e-HKD are subject to market development and further investigation," the report said. "Minor frictions identified during the pilots could become more apparent or even unacceptable to users in the production environment."

Phase 1 of the pilot involved diving into full-fledged payments, programmable payments, offline payments, tokenized deposits, settlement of Web3 transactions and settlement of tokenized assets. Hong Kong will now "explore new use cases for an e-HKD and delve deeper into select pilots."

This will involve understanding the e-HKD's role in facilitating new ways of transacting goods and services while ensuring financial stability.

The bank's position on a retail CBDC appears to be in the middle of a multinational debate. The U.S. hasn't made any major decision on CBDCs, with the subject becoming a controversial presidential election issue; India has gone ahead with plans for a retail CBDC and Australia has said its CBDC is likely some years away because of unresolved issues.

Edited by Sheldon Reback.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Amitoj Singh

Amitoj Singh is a CoinDesk reporter.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.