Some time ago the media spread information that the Chinese authorities are working on their digital currency. Now it turns out that Hong Kong is considering a similar project.
The Chinese digital currency – according to information provided by the local authorities – is to be the decisive response of the Middle Kingdom to Facebook Libra. Therefore, it would be in line with the trend of creating digital currencies by nation-states or state associations. Recently, there have also been the first reports that the financial elite of the European Union are also thinking about Eurocoin.
Hong Kong and its own digital currency
Now, in turn, the topic of Hong Kong’s digital currency appears. The information was provided by the Hong Kong Monetary Authority (HKMA), which acts as the central bank. Apparently, the institution is studying this topic and will provide conclusions soon, as early as in the first quarter of 2020.
This should not surprise anyone, HKMA cooperates in this field in consultation with the authorities of mainland China. According to the information, the commission has signed a cooperation agreement with a subsidiary of the Institute of Digital Currency at the People’s Bank of China. If everything goes as planned, the Central Bank of the Middle Kingdom may be one of the first (not counting a failed experiment with Petro in Venezuela) to issue its own digital currency.
Currency not for retailers
However, which may upset fans of this type of payment, HKMA wants to design a new system so that it does not serve retail customers, but is only dedicated to domestic interbank payments, corporate wholesale payments and a “payment delivery” mechanism. In general, the idea is rather similar to JPM Coin, the JP Morgan coin. The project is to serve institutional clients and not necessarily citizens. At least at the beginning.
HMKA also signed a memorandum of understanding with the Bank of Thailand. In turn, the goal of this cooperation will be cooperation at the level of value exchange using digital currency.