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Central bank digital currency. 4|Wholesale CBDC: the key to Hong Kong’s transformation into a digital financial center

2022-01-18T10:49:46.161Z


The financial services industry has always been the "lifeblood" of Hong Kong. Even in the face of Sino-US frictions, the new crown epidemic and economic recession, it has continued to grow; as the country leads the technological revolution brought about by the development of digital renminbi, Hong Kong's financial industry is also undergoing rapid growth.


The financial services industry has always been the "lifeblood" of Hong Kong. Even in the face of Sino-US frictions, the new crown epidemic and economic recession, it has continued to grow; as the country leads the technological revolution brought about by the development of the digital renminbi, Hong Kong's financial industry is also entering a "non-stop". Success is a profound transformation”.

"The future trend of the financial industry is digitization, and digital currency will be the core part of the future financial infrastructure." Huang Yuanshan, a member of the Legislative Council of the electoral sector and director of the Public Policy Research Institute of the United Hong Kong Fund, described the development of the central bank's digital currency (CBDC) as a financial industry Digital "infrastructure first", "CBDC research and development is related to Hong Kong's transformation from a traditional international financial center to a digital international financial center."


The fourth in-depth report series on "Central Bank Digital Currency"


The analogy of "financial infrastructure" is not inaccurate. For Hong Kong, "wholesale central bank digital currency" (hereinafter referred to as wholesale CBDC) is particularly critical.

According to the Bank for International Settlements, wholesale CBDC refers to the central bank's digital currency for specific institutions, generally with strict access restrictions, "similar to institutions' reserve and settlement accounts in the central bank", and is often used for inter-bank payments, or as digital tokenization (digital tokenised) settlement infrastructure for financial asset transactions.

Specifically, what changes will wholesale CBDC bring to Hong Kong's financial industry, and is it really as important as "infrastructure"?

And what is the progress of wholesale CBDC in Hong Kong, and what are the key issues to be resolved?

In the future, can Hong Kong take advantage of the first-mover advantage of CBDC research and development to strengthen its status as an international financial center?

The Monetary Authority told "Hong Kong 01" that the central bank's digital currency research and development focus is mainly on wholesale CBDC.

(file picture)

Cheng Shi, Chief Economist of ICBC International, emphasized that the role of Hong Kong's offshore RMB hub will not be weakened in the short term, but will also gain broad opportunities, and its role is expected to grow steadily.

(provided by respondents)

You Yang, an assistant professor at the School of Economics and Management of the University of Hong Kong, once participated in Facebook's cryptocurrency project, and believes that "the difficulty of the central bank's digital currency is not purely technical, but how to integrate with the existing system." (Provided by the interviewee)

Central bank digital currency series reports:

Central bank digital currency.

1| CBDC becomes the focus of the Winter Olympics, how Hong Kong finance prepares for the technological revolution

Central bank digital currency.

2|One Coin with N Sides: Perspective on Innovation from the Change and Unchangeability of Currency Development

Central bank digital currency.

3|Retail CBDC: National R&D leads the world, Hong Kong is still on paper

Central bank digital currency.

4|Wholesale CBDC: the key to Hong Kong’s transformation into a digital financial center

For details, please read the in-depth report " Wholesale CBDC: The Key to Hong Kong's Transformation to a Digital Financial Center

" in the 300th issue of "Hong Kong 01" electronic weekly published on January 17, 2022

.

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Source: hk1

All news articles on 2022-01-18

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