Financial authorities in Hong Kong have unveiled a prototype of the Chinese autonomous territory’s personal central financial institution digital forex referred to as Project Aurum. The two-tier platform encompasses a wholesale interbank and a retail e-wallet system, individuals revealed.
Hong Kong to Issue Retail Tokens and Stablecoins as Part of Project Aurum
A collaboration between the BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority (HKMA), and the Hong Kong Applied Science and Technology Research Institute has produced a prototype of Hong Kong’s upcoming digital forex, the Bank for International Settlements (BIS) introduced.
Project Aurum is a full-stack, front-end and back-end, central financial institution digital forex (CBDC) system comprising a wholesale interbank system and a retail e-wallet system, the worldwide monetary establishment defined in a press launch this week.
Participants in Aurum need to launch two several types of digital tokens. The first type can be an intermediated digital forex whereas the second can be a CBDC-backed stablecoin circulated within the interbank system. The BIS remarked:
The latter is exclusive within the examine of CBDC to this point. Privacy, security and adaptability are core to the system.
“Bringing CBDC-backed stablecoins to life has never been done before and we, therefore, felt that doing so may supplement the growing body of research on private 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, “especially while seeking to design methods to verify the backing of the stablecoins, a highly topical matter.” Just like with its fiat forex, three of Hong Kong’s monetary establishments can be licensed to subject 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 particular administrative area began exploring the issuance of its personal CBDC in March 2021.
In September of this 12 months, the HKMA stated that it was getting ready to trial a digital model of the Hong Kong greenback (e-HKD) within the coming months. The financial authority additionally took half in trials of cross-border CBDC transactions with the People’s Bank of China and the central banks of Thailand and the United Arab Emirates.
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