Hong Kong’s fintech growth initiatives will be aided by research on central bank digital currency.
The Hong Kong Monetary Authority (HKMA) has released its “Fintech 2025” plan, which includes both retail and wholesale central bank digital currency (CBDC) as part of the digital finance innovation package.
CBDCs will allegedly play a role in the municipal administration’s objective of fostering full digital finance adoption by 2025, according to a press statement released on Tuesday.
The HKMA stated that it would strengthen its research efforts to assure Hong Kong’s readiness to float retail and wholesale CBDCs.
According to the release, the HKMA is working with the Bank for International Settlements to develop a retail digital Hong Kong dollar currency. According to reports, this study will look into the hazards, advantages, and possible applications of e-HKD money.
The HKMA also announced that it would continue collaborating with China’s central bank on cross-border DCEP use. Indeed, Hong Kong aimed to extend pilot tests for the PBoC’s digital yuan, according to Cointelegraph in May.
Meanwhile, the HKMA is a member of an Asian central bank consortium developing a multi-central bank digital currency bridge. The initiative relies on a previous partnership between Hong Kong and Thailand to create cross-border CBDCs using decentralized ledger technology.
One of Hong Kong’s fintech strategy’s five primary vital elements is the extended CBDC research plan. Other priorities include ensuring that the city’s banks embrace digital financial technologies and developing a robust data infrastructure to support the anticipated fintech boom.
Hong Kong also intends to use government-led policies to promote its complete fintech transformation and build the framework for developing a qualified workforce for the new digital financial paradigm.
Hong Kong is restricting access to cryptocurrencies in the context of its growing fintech emphasis. Back in May, the city’s Financial Services and Treasury Bureau proposed that the government limit crypto trading to authorized investors with portfolios worth at least $1 million.