In a follow-up to the previous eNews, HKUST Business School and HSBC have released the findings from their one-week Hypothetical e-HKD pilot program. This collaboration between academia and the private sector aims to explore the potential adoption of a retail Central Bank Digital Currency (CBDC) in Hong Kong, under the guidance of the Hong Kong Monetary Authority (HKMA).

The pilot was conducted on the HKUST campus involving 148 students and five merchants. During the pilot, 405 payment transactions worth HK$14,862 were successfully completed. The insights gained from this closed-loop pilot provide an initial picture of the benefits that a CBDC ecosystem could potentially provide in everyday payments.

Although the pilot had limitations in terms of its closed-loop system, free e-HKD tokens, and limited duration and sample size, merchants expressed interest in e-HKD if it provided faster transactions and lower fees, while both merchants and customers appreciated the ease-of-use programmability offered in running and verifying eligibility for promotions.

The pilot’s outcomes support ongoing discussions and experimentation for a potential launch of a retail CBDC in Hong Kong. Continued efforts are recommended, including exploring additional programmability use cases, developing a sandbox infrastructure, and scaling the pilot scope. The insights gained will contribute to the development of a potential CBDC ecosystem in Hong Kong.

Check out the key findings from our Factsheet.