October 28, 2020

Hong Kong actively explores the possibilities of state digital currency

Hong Kong Monetary Authority (HKMA) said it is conducting state digital research currency and the possibilities of its real application in the field of finance.

HKMA plans to publish results reportconducted research in the first quarter of 2020. The management announced the signing of a partnership agreement with a subsidiary of the Institute of Digital Currencies of the People’s Bank of China.

HKMA Senior Executive Officer Edmond Lau(Edmond Lau) talked about ongoing research on digital currency, which has been led by Project LionRock since 2017. In addition, Hong Kong Interbank Clearing with three other financial institutions, as well as the R3 blockchain consortium, are participating in the project.

According to Edmond Lau, HKMA is exploring the conceptdigital currency based on tokens and issue of debt securities via blockchain. In addition, experts evaluate how the Central Bank’s stablecoin can be used in payment systems, and they are also exploring the possibility of a two-level issue of digital coins so that companies can store and use them in banks.

Hong Kong Monetary AuthorityHe still believes that such stablecoins are more suitable for financial institutions than for retail customers. According to HKMA, the best areas of application for digital currency from the Central Bank will be domestic interbank payments, settlements between corporations and settlements on debt securities. As Lau noted, individual users already have wide access to mobile services for making digital payments.

Recall that in May HKMA signed an agreement withThe Bank of Thailand to conduct joint research on how the state digital currency can be used in making international and interbank payments.

In addition, in October, the Hong Kong regulator issued requirements for cryptocurrency fund managers, and this month plans to introduce licensing rules for cryptocurrency exchanges.

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