John Lee, chief executive of the Hong Kong Special Administrative Region, highlighted a bill to advocate implementing a statutory licensing scheme for issuers of digital assets.
The de facto central bank of the city, The Hong Kong Monetary Authority (HKMA), was mentioned in the policy speech for its efforts to conduct market discussions on stablecoin regulation in addition to its objectives to integrate local context and global regulatory standards with the impending regulatory framework.
In addition, the policy address recognized the HKMA for engaging with Mainland stakeholders to expand testing of China’s digital yuan and for establishing the framework for the upcoming rollout of the city’s retail central bank digital currency (CBDC), “e-HKD”.
The HKMA has already completed two out of three sessions of market consultation.
According to a blog post written by the central bank on September 20, participants in the survey expressed their support and raised issues with privacy, legal issues, and e-HKD use cases.
The HKMA stated that it will be employing a three-rail strategy in order to incorporate market feedback into the process of developing e-HKD. Rail 1 will focus on laying the technological and regulatory framework for the two-tier e-HKD system’s wholesale layer. Rail 2, which operates in conjunction with Rail 1, will address usage cases and application, implementation, and design throughout a number of test pilots. Rail 3 will feature the debut of the e-HKD.
The e-HKD launch date and schedule have not been specified by the HKMA. The development of the wholesale system, however, is anticipated to take approximately two to three years, and the planning process for the wholesale layer is due in June 2023.
Since June, Hong Kong has been experimenting with integrating e-CNY with its local payments system. In this most recent trial, it will be examined how Hong Kong residents can replenish their e-CNY digital wallets by utilizing the city’s quicker mobile payment system.
The HKMA published a document titled “e-HKD: A technological perspective” on October 4, 2021, which investigates various technical design choices for generating and distributing retail CBDCs.
