Hong Kong’s monetary affairs authority is currently investigating the use cases of CBDCs, with some preference for the solutions offered by Ripple as part of a tokenization of financial assets.
An important step forward for the use of CBDC technologies in Asia
With this in mind, Ripple will participate in the Central Bank Digital Currency (CBDC) pilot program initiated by the Hong Kong Monetary Authority (HKMA) in the coming days. This by presenting a solution for the tokenization of financial assets in addition to unveiling its new platform dedicated to the management of CBDCs.
Ripple will join Taiwan’s Fubon Bank and other financial entities to demonstrate the process of managing tokenized assets using a digital version of Hong Kong dollars, which will incorporate CBDC-related technologies and be referred to as e-HKD term.
Senior executives from the 16 shortlisted companies attended the launch event, where the companies presented the use cases they had previously developed.
Over the next few months, the HKMA will work closely with the selected companies to complete the pilot projects and monitor progress. Eddie Yue, HKMA’s chief executive, said:
“Although the HKMA has not yet made a final decision on the launch of e-HKD, we are delighted to kick off the pilot program which represents a great opportunity for us to collaborate with important players. industry to explore innovative use cases. ยป
Although the actual results of the pilot projects may change over time, the HKMA aims to share the main results with the public during the Hong Kong FinTech Week 2023. In addition, the HKMA is already planning to conduct other rounds pilot projects with industry in the near future.
In a statement to local press, Ripple said that the principle of tokenization in this context has the purpose of reducing friction in the process of releasing shares. Put simply, this means that banks will be able to perform a number of transactions faster and more efficiently.
Hong Kong began its research on CBDC-related technologies in early 2017. Although it seems likely that e-HKD cannot have a significant role in the retail payment solutions market , at least in the near future, the HKMA announced in a document to be convinced that this could well change within a few years.
If you want to know more about the development of the crypto ecosystem in Hong Kong and the CBDCs, do not hesitate to consult our previous articles on the subject: