Other possible use cases for the potential minting of the “e-HKD” include programmable payments, tokenized deposits and settlements of Web3 transactions

With real-world asset tokenization predicted to be a major financial instrument by 2030, the Hong Kong Monetary Authority’s inaugural e-HKD Pilot Program will be taking deep dives into potential use cases in six categories, including full-fledged payments; programmable payments; offline payments; tokenized deposits; settlement of Web3 transactions; and settlement of tokenized assets.

According to the monetary authority’s Chief Executive Eddie Yue: “While the HKMA has not yet made a decision on whether and when to introduce e-HKD, we are excited to kick-start the e-HKD Pilot Programme, which serves as a tremendous opportunity for the HKMA to collaborate with the industry in exploring innovative use cases and maximizing our readiness for a potential e-HKD. We are also pleased to have many experts in academia joining forces with us on this CBDC journey. By fostering government-industry-academia collaboration in CBDC research, we aim to ensure the relevance of our research and development efforts, and enable the translation of such outcomes into viable business opportunities.”

The e-HKD Pilot Programme is a key component of Rail 2 under the HKMA’s three-rail approach in paving the way for the possible implementation of a retail CBDC (i.e., e-HKD) in the future.

According to James Wallis, Vice President of Central Bank Engagements & CBDCs, Ripple — a firm selected as a stakeholder of the pilot program in the area of real estate asset tokenization and equity release with partner Fubon Bank (Hong Kong): “The Asia Pacific region has many forward-looking regulators such as the HKMA, who are looking to leverage the capabilities of blockchain technology. We now have the opportunity to demonstrate how real estate asset tokenization could be brought to the citizens of Hong Kong.” Wallis was referring to the fact that, for most people in Hong Kong, unlocking their property assets’ equity can be costly, lengthy, and cumbersome. Through asset tokenization and blockchain technologies, citizens could experience the release of equity faster and more efficiently.