The Hong Kong Monetary Authority (HKMA) has allied with domestic banks, Hong Kong Interbank Clearing, and the R3 consortium to research on digital currency.
The regulator said that the project is currently in its first phase, which involves use of distributed ledger technology to assess the utility of the digital currency.
The allies are currently evaluating the use of such a currency in making local inter-bank payments, inter-corporate payment and delivery versus payment debt securities settlement. HKMA expects to accomplish the proof-of-concept work by the end of 2017.
“Subject to the findings of the first phase, HKMA will map out the next steps,” the regulator said.
The latest move by HKMA follows the footsteps of regulators in the UK, Canada, and Singapore which have taken similar initiatives in the recent times.