Hong Kong’s central bank begins new phase of its CBDC pilot

The Hong Kong Monetary Authority has launched phase two of its e-HKD pilot program.

According to a post on the central bank’s website Thursday, the next phase of the program will see where an e-HKD — Hong Kong’s potential future central bank digital currency — adds value through programmability, atomic settlement and even tokenization. 

The second phase will also “explore new use cases that have not been covered in the previous phase.”

“An enhanced e-HKD sandbox, leveraged on the wholesale central bank digital currency (wCBDC) sandbox to be built under Project Ensemble, will support Phase 2 of the e-HKD Pilot Programme to accelerate the prototyping, development and testing of use cases by pilot participants, as well as facilitate the study of interoperability and interbank settlement between e-HKD and other forms of tokenised money,” the central bank said.

Read more: Hong Kong official plots rules for stablecoins, crypto OTC services

However, it’s still unclear if the HKMA will move forward with a CBDC. 

The research, the HKMA said, will continue so that the central bank can see how CBDCs would interact in a “future digital money landscape.”

Organizations can apply to participate in the second phase until mid-May. 

“The HKMA will also continue to engage local and international stakeholders regarding the latest development of CBDCs,” the release said.

Last week, Hong Kong unveiled Project Ensemble, which seeks to utilize a sandbox to test out tokenization use cases which could include testing out real-world use cases from carbon credits to treasury management. 

Read more: Tokenization top of mind for Hong Kong’s securities regulator

At the end of October last year, the HKMA wrapped up phase one of its CBDC pilot. At the time, the project found that the CBDC could “improve customer protections and promote trust” between both businesses and consumers through smart contracts. 

---

Get the news in your inbox. Explore Blockworks newsletters:

• Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
• Empire: Start your morning with the top news and analysis to inform your day in crypto.
• Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
• 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
• Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
• The Drop: For crypto collectors and traders, covering apps, games, memes and more.
• Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.