The Hong Kong Monetary Authority (HKMA) is exploring whether to launch a centralised digital currency as part of the country's "Fintech 2025" strategy".
The HKMA will soon begin a comprehensive study on e-HKD to understand its use cases, benefits, and related risks, chief executive Eddie Yue revealed at a seminar this week.
"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," he added.
"We have already established an internal cross-departmental working group within the HKMA to study the relevant technical, policy and legal issues, and we hope to offer our initial thought[s] on this complex matter in 12 months' time."
The HKMA also stated it will continue to work with the People's Bank of China in supporting the technical testing of e-CNY, China's digital yuan, in Hong Kong with the aim to provide a convenient means of cross-boundary payments for both domestic and mainland residents.
This comes as part of the country's new fintech strategy, "Fintech 2025", which aims to encourage comprehensive technology adoption across its financial sector by 2025 and promote the provision of fair and efficient financial services for the benefit of Hong Kong citizens and the economy.
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As part of this, the HKMA will promote the all-round adoption of fintech by Hong Kong banks and fully encourage them to digitalise their operations, "from front-end to back-end". To support this, it will roll out a "Tech Baseline Assessment" to take stock of banks' current and planned adoption of fintech and identify areas that would benefit from HKMA support.
The authority also hopes to take the lead in enhancing the city's existing data infrastructure and build new ones. Additionally, it wants to increase the supply of fintech talent by introducing initiatives such as a fintech training programme and qualifications, as well as promoting joint projects between industry and academia.
The HKMA said that the full details of the strategy will be unveiled at a later date.
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Zach Marzouk is a former ITPro, CloudPro, and ChannelPro staff writer, covering topics like security, privacy, worker rights, and startups, primarily in the Asia Pacific and the US regions. Zach joined ITPro in 2017 where he was introduced to the world of B2B technology as a junior staff writer, before he returned to Argentina in 2018, working in communications and as a copywriter. In 2021, he made his way back to ITPro as a staff writer during the pandemic, before joining the world of freelance in 2022.