Monetary authorities in Hong Kong have unveiled a prototype of the Chinese language autonomous territory’s personal central financial institution digital foreign money referred to as Challenge Aurum. The 2-tier platform includes a wholesale interbank and a retail e-wallet system, members revealed.
Hong Kong to Subject Retail Tokens and Stablecoins as A part of Challenge Aurum
A collaboration between the BIS Innovation Hub Hong Kong Centre, the Hong Kong Financial Authority (HKMA), and the Hong Kong Utilized Science and Expertise Analysis Institute has produced a prototype of Hong Kong’s upcoming digital foreign money, the Financial institution for Worldwide Settlements (BIS) introduced.
Challenge Aurum is a full-stack, front-end and back-end, central financial institution digital foreign money (CBDC) system comprising a wholesale interbank system and a retail e-wallet system, the worldwide monetary establishment defined in a press launch this week.
Members in Aurum wish to launch two several types of digital tokens. The primary sort shall be an intermediated digital foreign money whereas the second shall be a CBDC-backed stablecoin circulated in the interbank system. The BIS remarked:
The latter is exclusive in the research of CBDC thus far. Privateness, security and suppleness are core to the system.
“Bringing CBDC-backed stablecoins to life has by no means been completed earlier than and we, due to this fact, felt that doing so could complement the rising physique of analysis on non-public sector stablecoins,” the mission’s authors elaborate. They additional clarify that in distinction with non-public stablecoins, Aurum’s stablecoin balances are reconciled, versus real-time gross settlement balances of the issuing financial institution with the central financial institution.
The builders consider that the system of CBDC-backed stablecoins can be utilized by financial authorities after they attempt to work out the regulatory approaches in regard to personal sector stablecoins, “particularly whereas searching for to design strategies to confirm the backing of the stablecoins, a extremely topical matter.” Identical to with its fiat foreign money, three of Hong Kong’s monetary establishments shall be licensed to situation state-backed digital cash.
Hong Kong, one of many world’s main monetary facilities, has been intensifying efforts to meet up with others on the CBDC growth entrance, together with mainland China which has been increasing the digital yuan (e-CNY) pilot. The Chinese language particular administrative area began exploring the issuance of its personal CBDC in March 2021.
In September of this 12 months, the HKMA mentioned that it was making ready to trial a digital model of the Hong Kong greenback (e-HKD) in the approaching months. The financial authority additionally took half in trials of cross-border CBDC transactions with the Folks’s Financial institution of China and the central banks of Thailand and the United Arab Emirates.
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