Exploring the Future of Digital Currency: The Launch of Project e-HKD+

On September 23, the Hong Kong Monetary Authority (HKMA) launched Phase 2 of the e-HKD Pilot Programme, referred to as Project e-HKD+. This new phase marks a significant expansion in the investigation of digital currencies, including the electronic Hong Kong dollar (e-HKD) and tokenised deposits. The initiative aims to create a robust ecosystem for digital money that could have a substantial influence on both individual consumers and businesses.

Project e-HKD+ encompasses a broader scope, involving 11 groups from various sectors tasked with exploring practical applications across three main areas: the settlement of tokenised assets, the programmability of digital currencies, and the potential for offline payment methods. This exploration not only delves into technological advancements but also evaluates the commercial viability of these digital currencies in real-world situations.

To encourage collaboration among industry stakeholders, the HKMA has established an e-HKD Industry Forum. This platform aims to facilitate discussions on shared challenges and potential advancements in digital money technology, with a particular focus on programmability issues. Additionally, the formation of industry-led working groups is expected to generate specific recommendations and strategies to promote broader adoption.

The HKMA’s Chief Executive, Mr Eddie Yue, has highlighted the authority’s dedication to innovation in digital money. The e-HKD Pilot Programme has offered valuable opportunities for the HKMA to explore how new digital currency forms can provide unique benefits to the public. The HKMA looks forward to collaborating closely with industry participants throughout Phase 2 to co-develop innovative use cases.

This phase of Project e-HKD+ is anticipated to last around 12 months. By the end of 2025, the HKMA plans to share insights and outcomes with the public. The findings from this phase will be vital in understanding the practical challenges and opportunities associated with implementing a scalable and effective digital money system.

The initiative represents a concerted effort to enhance the digital currency landscape in Hong Kong, fostering innovation and collaboration among various stakeholders to explore the potential of digital money in the modern economy. The outcomes of this exploration may lead to transformative changes in how individuals and businesses engage with financial transactions in the future.