Global Trustee and Fiduciary Services Bite-Sized Issue 10 2024

CBDC HKMA Commences Phase 2 of e-HKD Pilot Programme and Expands Project e-HKD to Explore New Forms of Digital Money On 23 September 2024, The Hong Kong Monetary Authority (HKMA) commenced Phase 2 of the e-HKD Pilot Programme (Phase 2) to delve deeper into innovative use cases for new forms of digital money, including e-HKD and tokenised deposits, that can potentially be used by individuals and corporates. As Project e-HKD expands its coverage from e-HKD only to a more comprehensive exploration of the digital money ecosystem, the project has been renamed as Project e-HKD+, reflecting the evolving fintech landscape and the HKMA’s commitment to unlocking the full potential of digital money. The HKMA says the e-HKD Pilot Programme is an integral part of Project e-HKD+. Under Phase 2, 11 groups of firms from various sectors have been selected to explore innovative use cases for e-HKD and tokenised deposits across three main themes, namely settlement of tokenised assets, programmability and offline payments. The selected firms will also examine the commercial feasibility, within a real-world setting, of new forms of digital money that may potentially be accessible to individuals and corporates. The HKMA says the outcome of Phase 2 will help it understand the practical issues that may be faced in designing, implementing and operating a digital money ecosystem that comprises both publicly and privately issued digital moneys. Project e-HKD+ will continue to advance the technology and legal groundwork to support the potential issuance of an e-HKD for the use of individuals and corporates in the future. The HKMA says it will also establish the e-HKD Industry Forum to provide a collaborative platform for participating institutions to discuss common issues and further explore the possible implementation and adoption of new forms of digital money in a scalable manner. Under the Forum, industry-led working groups will be established to make recommendations on specific topics, with an initial focus on issues related to programmability. Similar to Phase 1, an e-HKD sandbox will be made available to pilot participants to accelerate their prototyping, development and testing of use cases. The HKMA will work closely with the selected firms in the next approximately 12 months in conducting Phase 2, with the aim of sharing the key learnings from Phase 2 with the public by the end of 2025. Link to Announcement here Link to Annex here Securities Services Bite-Sized Global Trustee and Fiduciary Services QUICK LINKS Issue 10 | 2024 CBDC CRYPTOASSETS FINTECH LIBOR TRANSITION OPERATIONAL RESILIENCE PRIIPS SUSTAINABLEFINANCE/ESG T+1 ASIA/PACIFIC EUROPE NORTH AMERICA UNITED KINGDOM