Hong Kong Gets Closer To Issuing Central Bank Digital Currency

Hong Kong gets closer along with Thailand, to create a central bank digital currency that will facilitate efficient payments between both of the countries as per the published report that we have in our altcoin news.

Both banks confirmed that the upcoming CBDC dubbed Project Inthanon-LionRock which is technically feasible, it will continue to utilize the blockchain technology to make cross border settlements much more transparent and cheaper with lowered risks. Hong Kong gets closer to the idea after the monetary authority of the country stated that the current payment systems are efficient and as such, they don’t have to adopt a CBDC for payments within the country. However, the HKMA believes cross-border payments are also very expensive and inefficient so digital currency could solve the problem, according to the executive director at HKMA Colin Pou.

The banks didn’t give a timeframe in which they will launch and start using the central bank digital currencies for real transactions but they do plan to continue working on the joint project with Thailand. While the HKMA and the bank of Thailand conducted a lot of studies on the technical concerns for leveraging distributed ledger technology for cross-border payments and a lot of discussions about the impact of liquidity and exchange pricing.

Pou continued to say that other central banks could be added to the new project or can be linked to other separate initiatives. Central banks that aim to adopt cryptocurrencies are getting in a larger number and now more banks are actively working on a CBDC or new payment systems with fewer risks. The six major central banks including Japan, Britain, and Sweden, formed a group with the bank of international Settlements to research the use cases for the central bank digital currencies.

The president of the European Central Bank, Christine Lagarde, commented as well, saying that the ECB is considering launching their CBDC but without interfering with private companies that have a similar digital remittance network. Lagarde said in an interview:

 “We are looking closely into the feasibility and merits of a CBDC, also because it could have major implications for the financial sector and for the transmission of monetary policy.’’