Hong Kong Has No Plans For Central Bank Digital Currency, Says Govt Official

News | June 1, 2018 By:

Joseph Chan, Hong Kong’s acting secretary for financial services and the treasury, said that the Hong Kong Monetary Authority (HKMA) is currently not considering any plans to issue a central bank digital currency (CBDC).

During a Legislative Council meeting on Wednesday, Chan told legislators that the central bank’s research on the topic concluded that a CBDC would not be a clear improvement over Hong Kong’s existing payment infrastructure.

“The HKMA has carried out research on CBDC. At the same time, the HKMA notes that the benefits of CBDC and its efficiency gains will depend on the actual circumstances of a jurisdiction,” Chan said. “In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.”

Chan also noted that the Committee on Payments and Market Infrastructures (CPMI) and the Markets Committee (MC) of the Bank for International Settlements have formed a working group comprising all major central banks to conduct an in-depth study on the subject. He said the overall finding is that “currently proposed implementations of CBDC for wholesale payments look broadly similar to, and not clearly superior to, existing infrastructures.”

“Benefits of a widely accessible CBDC may be limited if efficient private retail payment products are already in place or in development,” Chan said. “As a result, CBDC remains a subject which requires further study and more proof-of-concept work to ascertain its feasibility for payment applications.”

Furthermore, Chan said that the government will continue to closely monitor the development of initial coin offerings (ICO) and cryptocurrencies, in order to protect the interest of the investing public.

“The government, relevant regulators and the Investor Education Center have rolled out a series of measure to remind investors of the associated risks.”