In order to formulate the best strategy for the integration of retail digital currency, the central bank of Hong Kong has taken another step in the process of issuing its retail digital currency by calling for public comments.
The Hong Kong Monetary Authority (HKMA) has published a discussion paper which was titled “e-HKD: A Policy and Design Perspective.” The paper expressed the central banker’s views and also sought public comments on the retail digital currency.
According to the paper, the HKMA has been researching major issues that may surround the retail CBDC, these include the potential benefits and challenges, design considerations like issuance mechanism, interoperability with other payment systems, legal considerations, and use cases as well as privacy and data protection.
The HKMA is however of the opinion that Hong Kong lacked several motivations for the issue of retail digital currency. Their reasons include; a decline in cash usage, a need to encourage financial inclusion, improving payment system resilience, and supporting innovation. The HKMA opined that the country’s payment system is strong, and the e-HKD may be unnecessary due to the availability of the Hong Kong Dollar.
Furthermore, the authority also pointed out multiple issues confronting the rolling out a retail digital currency. Part of these issues is the possible impact on commercial banks, vulnerability to power outages, cybersecurity risks and so on. Meanwhile, the chief executive of HKMA, Eddie Yue in a statement noted that the paper is a major milestone for the body.
“This Paper marks another milestone in our exploration for the e-HKD… We strongly encourage the public and the industry to take part in this important consultation and share their views with us,” he said.
He posited that opinions from the general public and digital currency industry participants would be of great help for the Chinese special administrative region to formulate the most reasonable technique for issuing retail digital currency.
Hong Kong Pursuit of Wholesale CBDC
In the HKMA consultation, the HKMA portal is open for opinions on twelve discussion questions in the paper till May 27. Last year, there was a publication by the agency regarding the technical aspects of the CBDC which the agency has previously studied.
The region is also working with China on the integration of the digital yuan into its financial system; it also collaborates with the Bank of International Settlements (BIS) and central banks of Thailand, the UAE and China to experiment a wholesale cross-border digital payments project.
You can also learn more about trading in Kucoin and Binance exchanges through the education and information provided by experts with many years of trading experience. Use our discount PRO5% to get premium membership today by clicking on this link to join our telegram channel.
