Hong Kong's e-HKD better suited to wholesale use than retail, HKMA says

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) is prioritizing the development of the e-HKD for wholesale applications due to its greater potential value in large transactions compared to daily retail use [1][2]. Group 1: e-HKD Development Focus - The HKMA announced its decision to focus on wholesale applications after a second phase of e-HKD trials, which assessed usability and efficiency in both retail and wholesale scenarios [2][5]. - The e-HKD is recognized as a digital version of fiat currency built on blockchain technology, which is free of credit risks, making it desirable for financial institutions in large-valued transactions [2][4]. Group 2: Future Applications and Partnerships - Financial institutions have already utilized the e-HKD for wholesale interbank cross-border settlements and securities transactions, with the HKMA aiming to attract more large financial institutions and companies for future pilot projects [5][7]. - The HKMA has not provided a specific timeline for the wholesale application of the e-HKD, indicating that the rollout will depend on advancements in technology and user attitudes towards central bank digital money [6]. Group 3: Industry Collaboration - The HKMA expressed encouragement regarding the gradual increase in wholesale applications of the e-HKD by financial institutions and emphasized the importance of continued collaboration with the industry on the CBDC and tokenization journey [7].