Visa, in collaboration with HSBC and Hang Seng Bank, has successfully completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) Pilot Programme, marking a significant step in the development of digital currency solutions.
This pioneering program, known as e-HKD, focuses on the tokenization of deposits, where funds deposited with a bank are represented as tokens on the bank’s own blockchain ledger, backed by its balance sheet.
One of the key findings of the e-HKD Programme is the remarkable speed of final settlement for interbank transfers, which approached near real-time. During the pilot, tokenized deposits were essentially transferred from the sender’s bank ledger to the recipient’s bank ledger and simultaneously settled through a simulated wholesale CBDC (Central Bank Digital Currency) layer.
![Visa Pioneers Digital HK Dollar Payments with Successful Pilot Test image 4](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/11/image-4.png?resize=1024%2C623&ssl=1)
![Visa Pioneers Digital HK Dollar Payments with Successful Pilot Test image 4](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/11/image-4.png?resize=1024%2C623&ssl=1)
Visa’s platform demonstrated exceptional reliability by operating 24/7, unlike traditional payment systems that have limitations in terms of operating hours and days of the week. The use of blockchain networks accessible globally, supported by teams in different time zones, ensured seamless functionality.
The security of transactions was a fundamental aspect of the pilot. Tokenized deposits were transacted with encryption, providing transparency on blockchain explorers while maintaining the confidentiality of participant identities, balances, and transaction amounts from non-bank users.
Looking ahead, Visa is actively exploring opportunities in tokenized asset markets and programmable finance. For example, within the “Property Payments” use case, payments related to property transactions could be automated upon reaching contract completion dates, streamlining the closing process.
The successful results of the e-HKD Pilot Programme have paved the way for phase two of this innovative initiative, signaling a promising future for CBDCs and blockchain-based financial solutions in Hong Kong.
ALSO READ
- Digital yuan app now accepts prepaid Mastercard and Visa top-ups for tourists
- Visa’s Global Expansion with USDC on Solana