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Hong Kong's central bank works on digital currency prototype

Tuesday 11 April 2017 | 11:45 AM CET

The Hong Kong central bank has announced that it plans to start developing a prototype digital currency.

The Hong Kong Monetary Authority (HKMA), which acts as the region’s central bank and finance regulator, is working with Hong Kong Interbank Clearing Limited (a clearinghouse in which it has an ownership stake), several undisclosed banks and R3, a distributed ledger startup, on the initiative.

The disclosure came in a Hong Kong legislative document published by the Legislative Council Panel on Financial Affair dated 18th April, according to CoinDesk.

The document explained: “The first phase of the research, which explores the feasibility of [central bank-issued digital currency] in performing domestic inter-bank payments, inter-corporate payment in the wholesale market and delivery versus payment (DvP) debt securities settlement, is expected to be completed in the fourth quarter of this year. Subject to the findings of the first phase, HKMA will map out the next steps.”

The HKMA is expected to complete the proof-of-concept by the end of 2017, after which further steps may be taken toward developing the digital currency project.

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