Visa completes Hong Kong digital currency trial with HSBC and Hang Seng
Hong Kong is one step closer to a central bank digital currency (CBDC) with the release of its successful phase 1 results in collaboration with Visa, HSBC and Hang Seng Bank.
According to a Nov. 1 announcement, Visa said that it achieved “near real-time” finality with transfers involving tokenized deposits of the digital Hong Kong dollar (e-HKD).
“Tokenized deposits were burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer,” the payments firm wrote.
“This would provide for settlement in an atomic manner with better streamlining of any operational dependencies imposed by financial institutions and other intermediaries, thus improving liquidity management.”
The payment processor also stated that its digital HK dollar test pilot was functional 24/7, surpassing the uptime of traditional financial systems, which typically don’t function after hours or on weekends. In addition, the firm wrote that “tokenized deposits can be fully transacted while remaining encrypted, without revealing information about identity, balances, or transaction amounts to non-bank users.”
For its next steps, Visa plans to explore the use of e-HKD in tokenized asset markets and programmable finance to automate real estate transactions. “In this pilot’s Property Payments use case, the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimizing lag time in closure of the process,” the company said. Other areas of research interest include the expansion of retail solutions and digital cross-border payments.
Despite the promising results, no definite timelines have been given for the full launch of the Hong Kong digital dollar or even that such a launch will occur. In its Oct. 30 report, the Hong Kong…
..
