In June of this year, the Hong Kong Monetary Authority began investigating the possibility of a retail central bank digital currency (CBDC).
It has recently released a technical whitepaper that examines various architectures and design possibilities for the CBDC if one is granted.
The HKMA has not yet determined whether or not to issue the retail CBDC, but it has begun study under the e-HKD project.
The technical whitepaper is part of that study, and the HKMA hopes to use it to start a conversation on the best architecture for e-HKD and assess its advantages and dangers.
A two-tier distribution strategy for a retail CBDC, according to the HKMA, is a smart design: the wholesale and retail layers.
The wholesale layer allows only more trustworthy intermediaries to participate, but the retail layer is an open system open to the entire public, according to the HKMA.
To put it another way, the HKMA would issue and redeem a retail CBDC, while commercial banks would distribute and circulate it.
The HKMA has highlighted many topics for additional debate based on its suggested technological design, described as seven-issue statements.
Privacy, interoperability, performance, and scalability, as well as cybersecurity, compliance, operational robustness and resilience, and technology-enabled functional capabilities, are all priorities.
By December 31, the HKMA is looking for input and recommendations from academics and the industry on its suggested design.