After releasing A Technical Perspective of the e-HKD in 2021, the Hong Kong Monetary Authority (HKMA) followed up with a consultation document in April 2022.

In May of the same year, they launched a pilot program. Recently, during the Hong Kong FinTech Week forum, Mr. CHOU Wai Keung, George, the Chief Fintech Officer of the HKMA, announced the completion of the first round of trials.

Mr. Eddie Yue, Chief Executive of the HKMA, said in the press release of the “e-HKD Pilot Programme Phase 1 Report”,

“Phase 1 of the e-HKD Pilot Programme has examined many innovative use cases of an e-HKD and has provided valuable insight to the HKMA on how an e-HKD can potentially add tangible value to businesses and consumers. These pilots have also raised a number of areas for future study.”

Mastercard Boosts Consumer Confidence

Ashok Venkateswaran, Vice President-APAC head for digital assets and blockchain, pointed out a special application in the e-HKD pilot programme, which involves integrating non-fungible tokens (NFTs) with luxury watches.

By adding NFT certificates to these high-value goods and utilising the programmability of the e-HKD for authentication, it ensures that only verified authentic items can be successfully traded. This application has the potential to boost consumer confidence and safeguard their interests.

During the conference, he also emphasised the importance of programmability in the world. Programmability is not only an innovative form of trust but also provides tangible benefits for regulatory agencies, financial institutions, and end-users.

eHKD of Hang Seng Bank

According to a report by Hong Kong Wenweipo, on November 3rd, Gilbert Lee Man Lung, Head of Strategy & Planning and Chief of Staff to CE at Hang Seng Bank, introduced the bank's pilot programme at the Hong Kong Fintech Week Forum.

This programme involves establishing a private blockchain system specifically for digital token insurance as well as a hypothetical digital wallet called "Digital Harbour Dollar" for managing and issuing these tokens.

Resource: Sing Tao News, Mr. CHOU Wai Keung, George, Chief Fintech Officer on the left

In this programme, Hang Seng Bank has implemented two main application scenarios:

Merchant Rewards Programme

The first scenario is the Merchant Rewards Programme, which allows merchants to offer digital bonuses to customers. For example, they can provide purchasing power equivalent to 100 yuan, but this can only be used in specific stores and for specific items with a set expiration date.

These conditions are all implemented through blockchain technology, aiming to assist small and medium-sized enterprises in advancing digital payments.

Government Subsidies and Fund Disbursements

The second application scenario involves government subsidies and fund disbursements. In this scenario, the government can provide grants to specific industries and strictly regulate the flow and purpose of the funds.

For example, they may stipulate that the funds can only be used for paying employee salaries and not for purchasing stocks, among other restrictions.

This approach helps reduce the risk of fund misuse while enabling the government to track and assess the actual impact of the subsidies effectively.

80% Satisfied Experience

These experiments were successfully conducted in September and October, involving over 150 individual users, 7 merchants, 1 public institution, and over 500 transactions. Participants included the e-HKD and the Chinese University of Hong Kong.

The results show that approximately 80% of participants are satisfied with this new experience, considering the programmable features as a unique selling point for the e-HKD.

All participating merchants also believe that the e-HKD has a positive impact on their businesses, aiding in the digitization of the payment process.