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A senior government official from Hong Kong has ruled out plans for a central bank digital currency (CBDC) presently, claiming the country already has an efficient payments infrastructure.

The Hong Kong Monetary Authority (HKMA), the autonomous region’s defacto central bank, isn’t about to issue a digital currency anytime soon despite carrying out research on a CBDC.

Speaking at a Legislative Council meeting on Wednesday, acting secretary for financial services and the treasury Joseph Chan revealed the HKMA acknowledged CBDCs as an ‘important subject’ alongside the world’s major central banks. However, an extensive research effort has seen the central bank conclude that the benefits of a CBDC would be minimal in Hong Kong.

The official told lawmakers:

“The HKMA has carried out research on CBDC. At the same time, the HKMA notes that the benefits of CBDC and its efficiency gains will depend on the actual circumstances of a jurisdiction. In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.”

Chan also touched on a global effort by the Committee on Payments and Market Infrastructures (CPMI) and the Bank of International Settlements, commonly seen as the ‘central bank of central banks’, to research CBDCs through a working group of the world’s major central banks including the HKMA and the PBoC, China’s central bank.

Widely-deployed CBDCs will still see limited benefits in an ecosystem that has an efficient private retail payment structure, he claimed, insisting the HKMA will continue to engage its international counterparts, including the PBoC, to ‘study the potential and the costs and benefits of implementing CBDC’.

“CBDC remains a subject which requires further study and more proof-of-concept work to ascertain its feasibility for payment applications,” he added.

Furthermore, Chan told legislators that the government will continue to monitor the ICO and cryptocurrency space by keeping an eye on developments. Financial innovation will be promoted, the official said, stressing that the interest of the investing public will be paramount.

Beyond researching digital currency prototypes, the HKMA has also unveiled proof-of-concept blockchain platforms for applications in international trade finance as part of its broader fintech foray.

Featured image from Shutterstock.

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