Hong Kong’s Central Bank digital currency (CBDC) pilot program has finished its first phase, demonstrating possible developments in digital finance.
Hong Kong has completed the first phase of its CBDC study. It’s still unclear if they’ll release the e-HKD retail version in its entirety. Tokenization, programmability, and atomic settlement are a few of the potential areas that the project demonstrated.
Quick and definitive transactions are possible with atomic settlement, which may help companies that accept digital payments rather than cash. Collaboration between middlemen and businesses will be essential to accelerating and optimizing processes.
More possibilities for banks and average users could result from tokenization, which would facilitate faster and more transparent asset purchases and sales.
These concepts were assessed for usefulness by the project. The CBDC’s programmability may contribute to consumer protection and increased trust between consumers and smart contract companies.
For instance, the Bank of China in Hong Kong and the China Construction Bank Asia assessed a “retail escrow product.” In other words, clients pay for goods or services in advance, and the seller automatically receives their money after the job is completed.
Additionally, a test involving installment payments with a refund mechanism was conducted The team has yet to decide which technology will be employed, though. The HKMA is considering using a non-DLT design or distributed ledger technology.
Although a non-DLT design may be simpler and less expensive because it integrates with the existing payment systems, a DLT design may be superior for interacting with other systems.
