Hong Kong Embarks on Retail CBDC Preparations

The Chinese Special Administrative Region of Hong Kong will begin laying the foundation of a public-use central bank digital currency (CBDC). The announcement from the Hong Kong Monetary Authority (HKMA) comes after a year-long listening exercise to weigh the benefits. The city-region is the latest in a long line of jurisdictions to consider a CBDC.

Hong Kong is considering its own central bank digital currency for retail use, according to the HKMA’s new report. Following an outreach campaign, the HKMA has concluded it is “necessary to at least start paving the way for possible future implementation” of a retail CBDC. The proposed digital currency will be known as the e-HKD.

Retail vs. Wholesale CBDCs

A CBDC is a digital form of a country’s fiat currency, issued and regulated by the central bank. However, retail CBDCs are digital currencies issued by central banks for the general public to facilitate everyday transactions. Wholesale CBDCs, on the other hand, target financial institutions and banks. They aim to streamline interbank transactions and settlement processes and reduce costs in the financial system.

The HKMA has been exploring CBDC since 2017. The body initially focused on a wholesale CBDC for large-value payments and cross-border transactions. In 2021, the HKMA began studying the possibility of issuing retail CBDC and initiated Project Aurum to examine the technical design.

In April 2022, the HKMA published a policy discussion paper titled “e-HKD: A policy and design perspective,” seeking feedback on introducing e-HKD (retail CBDC). According to the latest report, the HKMA received 75 responses from stakeholders, which were broadly positive.

However, respondents emphasized the need for holistic design, user privacy protection, cybersecurity, interoperability, and an inclusive ecosystem. 

CBDCs Are Controversial

Last week, BeInCrypto reported that the Greater Bay Area in South China—which includes Hong Kong, Guangdong, and Macao—may introduce its own programmable CBDC to streamline cross-jurisdiction commerce. A programmable CBDC refers to a central bank digital currency that incorporates smart contract capabilities. Issuers can control and restrict their use, which makes them controversial.

However, controversy surrounds the use of ordinary CBDCs, too. There are worries that their use will lead to limits on financial freedom and increased surveillance.


In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

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