Hong Kong forms CBDC expert group emphasizing interoperability, privacy

Time:2023-11-02 Source:coingeek 76175 views Web3 Copy share

Hong Kong is moving forward with its plans to achieve a central bank digital currency (CBDC) by establishing an expert group to assist its research.

The expert group comprises academics from five local universities from various sectors, including law, finance, economics, business, and IT. According to the Hong Kong Monetary Authority (HKMA), the expert group will be tasked with ensuring greater collaboration on CBDC research while keeping a close watch on the technical and policy direction of the e-HKD.

The banking regulator also entered a Memorandum of Understanding (MOU) with key universities, including the Chinese University of Hong Kong, Hong Kong Polytechnic University, the Hong Kong University of Science and Technology, the University of Hong Kong, and the City University of Hong Kong.

“We are pleased to join forces with leading academic experts as part of our exploration of key policy and technical issues surrounding wholesale and retail CBDCs,” said Howard Lee, Deputy Chief Executive of the HKMA. “The CBDC Expert Group will serve as a crucial component in reinforcing Hong Kong’s forefront position in CBDC research.”

Barely days after the signing of the MOU, the expert team has begun with preliminary preparations for two high-level papers. The first will explore the effects of privacy-enhancing technologies (PETs) in building trust in a potential e-HKD. In contrast, the second will focus on probing the interoperability of CBDCs across multiple blockchains.

The HKMA disclosed that the team will explore other salient features of CBDCs in the future and expressed a keen interest in inviting other academics from foreign universities to join the team. Furthermore, the HKMA says it will rely on the group to spearhead its efforts for training sessions and workshops relating to CBDCs.

Despite the plans for a CBDC, the HKMA says it will not be speeding up the processes for a launch but will adopt a slow-and-steady approach till all key players have achieved considerable experience. Hong Kong’s payment space is already littered with multiple payment alternatives, which experts say could stifle the adoption rates for the e-HKD.

“It is still the beginning of the trial process,” said HKMA Chief Executive Eddie Yue. “We have to find a use case that is better than the current retail payments. Because if you are either safer, faster, or more convenient, then it will not be doable.”

Central banks turning to experts for CBDCs

Despite the multiple layers of research ranging from proof-of-concepts (PoCs) to early-stage pilots, central banks are still turning to academia for guidance in their quests to launch CBDCs.

The European Union (EU) launched a market advisory group of financial experts to gauge its digital euro attempts. At the same time, the Bank of England has upped its dialogue with technology experts for its proposed CBDCs.

Others are leaning on public consultations before dipping both feet into CBDCs, with Australia, India, and Brazil toeing a similar path.

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