The central banks of Hong Kong, China, Thailand and the United Arab Emirates, together with the HMKA, are working on the development of mBridge, a cross-border central bank digital currency (CBDC) initiative.
The project is expected to launch in mid-2024. The initiative could provide an alternative to Swift’s dominant payments infrastructure, setting a precedent for further fragmentation of payments in other regions.
MBridge is coordinated by the Bank for International Settlements (BIS). The project will involve the participation of several major companies such as Tencent, owner of WeChat Pay, and the WeChat application.
The HKMA is also working on another CBDC-related project known as e-HKD. The digital currency has shown different use cases such as payments, deposits and investment scenarios.
Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority, added that e-HKD could be used in different areas, such as programmable payments, and in new regions, such as deposits and tokenized assets.
Currently the institution is carrying out tests with the participation of 16 large companies. In September, HSBC issued eHKD to around 200 students and staff at the Hong Kong University of Science and Technology Business School, with the aim of testing the use of the digital currency.
Two of the pilot participants, Standard Chartered and Fubon Bank, have begun investigating CBDC use cases. Fubon Bank has revealed its plans to work with Ripple (XRP) on a real estate tokenization pilot.