Hong Kong Monetary Authority (HKMA), Hong Kong’s de facto central bank, is already working on retail central bank digital currency in association with the Bank of International Settlements’ Innovation Hub in the city, according to the head of HKMA Eddie Yue.
In a speech delivered at a fintech conference in Hong Kong on Tuesday, Yue said Project Aurum will focus on the “technical aspect of issuing r-CBDCs and the possible architectural designs.”
He said that the whole CBDC’s designed in partnership with the Bank of Thailand to streamline cross border payments has been hailed as one of the most of its kind in the world, “a testimony that we stand at the forefront in the realm of wholesale CBDCs.”
It has already included one more participating jurisdiction, Yue said.
“Similar to the majority of central banks, we see that a lot of issues need to be thought through before issuing r-CBDC. For instance, how should we strike a right balance between privacy and traceability? How do we mitigate cybersecurity risks? How will it affect the effectiveness of monetary transmission?” he said.
“These are important questions that need to be answered before reaching a conclusion.”
The HKMA will, he said, soon begin a comprehensive study on e-HKD to understand its use cases, benefits and related risks.
“This is to increase our technical readiness so that we are prepared for all kinds of circumstances in the future, including the potential for Hong Kong to issue e-HKD.
THe HKMA will likely publish its initial thoughts in 12 months’ time, he said.
He said that the CBDC is one of the hottest topics in the world of central banking.