Hong Kong is Moving Forward with Both Retail and Wholesale CBDC

A number of announcements have recently come out of Hong Kong regarding Central Bank Digital Currencies (CBDCs). The recent announcements from the BIS Innovation Hub Hong Kong Centre and the Hong Kong Monetary Authority (HKMA) center on both the tokenisation of interbank payments and making retail CBDCs more palitable to the general public by focusing on privacy.

Let’s delve into the key developments in both retail and wholesale CBDC initiatives:

“Project Ensemble” focuses on advancing wholesale Central Bank Digital Currency (CBDC) settlements through tokenization. The project aims to streamline interbank settlements across various scenarios by tokenizing commercial bank money, including tokenized green bonds, carbon credits, and aircraft instruments.

The trials in a dedicated wCBDC Sandbox environment will involve a range of tokenized assets, fostering collaboration among banks, digital asset entities, technology firms, and academia through the wCBDC Architecture Community.

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Secondly “Project Aurum 2.0”, is focused on “enhancing privacy without compromising transparency or compliance”. Aurum 2.0 aims to incorporate privacy into the design of Hong Kong’s proposed retail CBDC.

Central Banks around the world have been stepping up their efforts concerning the implementation of CBDCs. However, it remains to be seen whether the general public has an appetite for central bank-issued digital currencies.