Hong Kong is set to trial its digital currency, e-HKD, focusing on its application in mortgage pricing and distribution.
The Hong Kong Monetary Authority (HKMA) is preparing to pilot e-HKD with select participants, aiming to streamline mortgage processes and offer more competitive lending rates.
According to reports, the e-HKD pilot could allow Hong Kong residents to borrow from multiple lenders at preferential rates, speeding up approval and disbursement times.
However, it remains uncertain if a new regulatory body will be established to oversee these digital mortgage transactions.
Several financial institutions, including Boston Consulting Group (BCG) and ZA Bank, have shown interest in this innovative use of e-HKD during initial pilot programs.
BCG’s estimates suggest that the application of e-HKD could extend to tokenizing assets, potentially digitizing assets worth around $4.6 trillion, mainly in residential property.
This initiative comes as China introduces its digital yuan, e-CNY, in Hong Kong, marking the first pilot of the digital yuan outside mainland China.
The e-CNY is currently being tested for cross-boundary payments, allowing Hong Kong residents to top up digital wallets with up to 10,000 CNY (approximately $1,385) through 17 retail banks, including Standard Chartered Bank, ZA Bank, and DBS Bank.
