Author: Gan Jia Ci
Interim Secretary for Financial Services and the Treasury Joseph Chan told the legislative council that the Hong Kong Monetary Authority (HKMA) has no intention of issuing a central bank digital currency (CBDC) yesterday.
Chan explained that research has proven CBDC to be less effective in Hong Kong as compared to other places. He stated,
“The HKMA has carried out research on CBDC. At the same time, the HKMA notes that the benefits of CBDC and its efficiency gains will depend on the actual circumstances of a jurisdiction. In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.”
However, he also mentioned that the financial officers are still keeping an eye on the development of ICOs and cryptocurrencies, as well as implementing suitable policies to meet the welfare of investors.
The claims made by the interim Secretary has been accounted for by another HKMA representative, although the latter did not provide any follow-up details regarding the research.
Recently, HKMA announced a joint project with the Monetary Authority of Singapore (MAS) aimed at implementing a distributed ledger technology “proof-of-concept”. In April 2017, the HKMA announced plans to develop a prototype digital currency.
According to the legislative document that was published, the HKMA declared,
“The first phase of the research, which explores the feasibility of [central bank-issued digital currency] in performing domestic inter-bank payments, inter-corporate payment in the wholesale market and delivery versus payment (DvP) debt securities settlement, is expected to be completed in the fourth quarter of this year. Subject to the findings of the first phase, HKMA will map out the next steps.”
The expected completion of the proof-of-concept was at the end of 2017, after which appropriate steps would be taken to develop the digital currency.