Hong Kong to start testing out central bank digital currency in Q4 - report

Hong Kong is planning to start trialing its central bank digital currency ("CBDC"), referred to as e-HKD, in the fourth quarter to determine whether it should be issued to the public, South China Morning Post reported Tuesday, citing a media briefing.After receiving 75 responses from an April consultation about its prospects for issuing a CBDC, the Hong Kong Monetary Authority "will start paving the way for possible implementation of e-HKD in the future," it said in a release. "Overall, the respondents are supportive of the e-HKD initiative and believe that e-HKD has the potential to make payments more effective while supporting the digital economy," Hong Kong's central banking institution noted. The respondents pointed out, though, that more work needs to be done in terms of examining privacy protection issues and legal considerations. The HKMA said it seeks to lay the technology and legal foundations for supporting developing the e-HKD. At the same time, it will explore a number of use cases and design issues related to the digital currency. Mainland China, by comparison, appears to be well ahead of the CBDC race as users of its digital yuan already mounted to 261M in 2021. A raft of central banks across the globe are at least studying the risks and benefits surrounding a CBDC. In August, Thailand's central bank planned to pilot a retail CBDC by year-end.