The Hong Kong Monetary Authority (HKMA) aims to establish a new Fintech Cross-Agency Cooperation Group to develop policies to promote the indigenous fintech economy.
The group’s establishment is one of several initiatives undertaken by the national monetary authority as part of its Fintech 2025 management plans.
The HKMA wants to roll out a Tech Baseline Assessment to make an assessment of banks’ existing and anticipated use of fintech in the years ahead, as well as to pinpoint fintech market segments or proprietary technology types that may be undeveloped and therefore would gain from HKMA support.
Eddie Yue, CEO of the HKMA, stated:
The Whitepaper marks the first step of our technical exploration for the e-HKD. The knowledge gained from this research, together with the experience we acquired from other CBDC projects, would help inform further consideration and deliberation on the technical design of the e-HKD.
He concluded, “We also welcome input and suggestions from academics and industry to broaden our perspectives.”
As per the report, the HKMA will focus on understanding the “potential architectures and design options” from a legal and functional policy standpoint, with the intent of developing a dual-tier system — the very first for a “central bank to issue and redeem CBDC,” and the 2nd for “commercial banks to distribute and circulate either rCBDC or CBDC-backed e-money.”
Hong Kong launched its CBDC research in 2017 with Project LionRock, and in early 2020, it began a seven-month engagement with the Bank of Thailand to investigate the “potential of wholesale CBDC for cross-border payments.”
To ensure an adequate supply of fintech skilled workforce, the HKMA intends to work with various strategic suppliers to groom both students and practitioners through a variety of projects, along with the development of fintech-specific training courses and credentials, including the promotion of joint industry-academia projects.
The Industry Project Masters Network (IPMN) plan is one example of such a scheme, which will be implemented this September to provide internship programs to postgrad students to participate in banks’ fintech projects involving federated learning and certain other artificial intelligence technology.