Hong Kong Steps Up Research Into Central Bank Digital Currency
Marie Huillet's original article for cointelegraph.com reduced by 42%
The Hong Kong Monetary Authority has revealed it is conducting research into applications for a central bank digital currency. HKMA reportedly aims to release a major report on its findings in Q1 2020.Collaboration with the People's Bank of China. HKMA had also just revealed it had signed a blockchain collaboration with a subsidiary of the Institute of Digital Currency at the People's Bank of China - an institution which many expect will be the first globally to launch a CBDC.
During the fintech recent, Edmond Lau - HKMA's senior executive director - gave insights into the bank's ongoing CBDC research, which has reportedly been conducted under the aegis of "Project LionRock" since 2017. The project is being conducted together with Hong Kong Interbank Clearing Ltd. and three further banks, as well as blockchain consortium R3.
It includes a proof-of-concept study on token-based CBDC, research into debt securities issuance using blockchain, an evaluation of CBDC's potential for payment systems and exploration of a possible two-tier issuance model, which would allow corporates to hold and use CBDC tokens as sponsored participants of their banks. This May, HKMA also signed a memorandum of understanding with the Bank of Thailand to conduct a joint research project into the use of a CBDC for cross-border payments and interbank payment-versus-payment services between the countries. As reported, Ethereum's co-founder and ConsenSys CEO Joe Lubin expressed his belief that the People's Bank of China is unlikely to implement the decentralized aspects of blockchain for its forthcoming CBDC.
He argued the asset is likely to be used to maintain authorities' existing oversight of capital flows and that the PBoC will make use of "Some of the cryptographic primitives of blockchain." The Bank of Thailand - together with R3 and global IT leader Wipro Limited - finalized a blockchain solution prototype for wholesale CBDC-based interbank settlements this spring.
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