e-HKD: A Technical Perspective

The HKMA began researching CBDC under Project LionRock in 2017, and has since then actively collaborated with other central banks in broadening the knowledge of wholesale CBDC. In 2019, the HKMA and the Bank of Thailand (BOT) jointly initiated Project InthanonLionRock to study the potential of wholesale CBDC for cross-border payments. The project entered the second phase in 2020 and was subsequently renamed to Multiple CBDC Bridge (mBridge) in February 2021, when it was joined by the Central Bank of the United Arab Emirates and the Digital Currency Institute of the People’s Bank of China (PBoC), and strongly supported by the Bank for International Settlements (BIS) Innovation Hub Centre in Hong Kong. Building on the knowledge and experience in wholesale CBDC, in June 2021, the HKMA commenced Project e-HKD, which is a retail or general-purpose CBDC (rCBDC) project that aims to study the feasibility of e-HKD. It comprises two components: a technology experimentation study and a comprehensive study of other issues, including legal and policy considerations.

This whitepaper is part of the technology experimentation study under Project e-HKD. It explores potential architectures and design options that could be applied to the construction of the infrastructure for distributing e HKD, and reports the initial thoughts and findings. Specifically, it aims to explore technology solutions that address the problems of cross-ledger synchronisation, over-issuance prevention, privacy-preserving transaction traceability, and flexible instantiations of different two-tier distributions models.