Diya Poddar
Bank of China Hong Kong has taken a major step forward in its digital currency rollout, completing the second phase of testing for the city’s central bank digital currency, the e-HKD.
This follows a series of pilot programmes first launched in 2023 by the Hong Kong Monetary Authority (HKMA) under the “Digital HKD Plus” initiative, aimed at integrating central bank digital currencies (CBDCs) into everyday finance.
The new round of testing, which included nearly 500 participants and more than 1,500 simulated transactions, focused on real-life applications, further accelerating the CBDC’s readiness for public deployment.
BOCHK issues blockchain-based wallets to 500 users
In the latest pilot concluded on August 5, the Bank of China Hong Kong (BOCHK) issued unified digital wallets to approximately 500 test participants.
Identity verification was required before activation, aligning with Hong Kong’s regulatory standards on anti-money laundering and user authentication.
The wallets were powered by BOCHK’s proprietary alliance blockchain, with full integration into multiple mobile banking applications. This allowed users to conveniently access their digital wallets through existing digital banking infrastructure.
Once the wallets were activated, users were provided with simulated digital Hong Kong dollar (e-HKD) vouchers. These were used to complete purchases at local coffee shops across the city, providing a retail-focused setting to evaluate payment speed, system stability, and transaction authentication.
Each of the 1,500 test transactions was validated using digital signatures from both the user and the participating banks, simulating the conditions of a live CBDC payment environment.
First pilot tested Web3 and programmable finance
The second phase builds on BOCHK’s earlier round of testing, which covered six categories of potential use.
In those trials, BOCHK and HKMA explored the use of e-HKD in programmable finance, government grant distribution, offline payments, tokenised asset settlement, and digital retail transactions.
These earlier tests marked the first official pilot under the HKMA’s three-rail approach for e-HKD development. With both the first and second scheduled pilots now concluded, the e-HKD project moves closer to the implementation rail, although no official launch date has been announced yet.
Hong Kong’s stablecoin rules come into effect
Alongside CBDC development, Hong Kong is also setting legal foundations for the broader digital asset space. On August 1, the city’s first stablecoin legislation officially came into effect, introducing a unified licensing and regulatory framework for fiat-backed stablecoin issuers.
This framework aims to ensure financial stability and investor protection while allowing regulated digital currencies to coexist with public sector CBDCs.
In addition, the Hong Kong government released its second digital asset policy statement this year, reinforcing its commitment to building a “full-fledged digital ecosystem.”
The statement outlined key focus areas such as local adoption, compliance infrastructure, and market development.
As the e-HKD moves through its pilot stages, the combination of private stablecoin regulation and government-backed digital currency experimentation positions Hong Kong as a dual-track leader in Asia’s rapidly evolving digital finance landscape.
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