By
Tolu Ajiboye
April 17th, 2024
The central bank of Hong Kong has charged other banks to come up with what they think the CBDC should look like.
Hong Kong has been frantically working toward launching its own central bank digital currency, the e-HKD, in 2023. However, a huge part of the plan is now up to the other banks, according to a CoinDesk report. The central bank of Hong Kong has charged other banks to come up with what they think the CBDC should look like. That is they must decide whether it will be fully centralized or decentralized.
Hong Kong Banks to Submit CBDC Proposals
Per the source, the country’s regulator permits only Hong Kong banks to do their research and submit counter proposals. This means that, unlike the People Bank of China’s e-CNY, the outlook of the e-HKD will not be influenced by its central government. Additionally, the source also suggests that the opinion of the general public might eventually not count in its making.
At the moment, banks have reportedly started gearing up to come forward and submit their proposals. For example, an unnamed major bank reportedly holds the position that the e-HKD should be hosted on a permissioned blockchain. But even this view is largely debated.
Recall that last year, Hong Kong Monetary Authority (HKMA) published a discussion paper, seeking stakeholders’ thoughts on a retail CBDC. Essentially, the concerns about the e-HKD ending up on a permissioned or permissionless chain bother around security and privacy.
To put the above statement into perspective, in a permissionless chain setting, authorities may not be able to seize the assets of a user under investigation, if such a user can withdraw to a self-custody wallet. Whereas, a permissioned chain would enable them to seize those assets.
Whatever the case may be, Hong Kong is wrapping up its CBDC efforts and will look to come to a reasonable conclusion in the year running. This is especially important for a society that is presently heavily reliant on cash for most of its daily activities.