HKMA Focuses on Wholesale Applications of e-HKD as Global Competition for Digital Currencies Intensifies

The Hong Kong Monetary Authority (HKMA) has revealed that groundwork for enabling the retail use of the digital Hong Kong dollar (e-HKD) is expected to be finalized by mid-2026, as reported by a

. The authority highlighted that, at present, the e-HKD—a central bank digital currency (CBDC)—is more appropriate for wholesale functions like cross-border payments and securities settlements. Its absence of credit risk makes it a compelling option for financial institutions, according to . Nevertheless, the HKMA is dedicated to exploring the e-HKD’s broader possibilities, including retail applications, as technology and regulations continue to evolve.

The choice to focus on wholesale applications comes after completing the second phase of trials, which assessed the e-HKD’s performance in both retail and wholesale settings. Howard Lee Tat-chi, HKMA’s deputy chief executive, explained that while the e-HKD’s function in everyday retail payments is still uncertain—given the presence of alternatives like stablecoins and programmable deposits—its value for large-scale transactions is “appealing” to financial firms, as per Yahoo Finance. The pilot programs, which included scenarios such as issuing digital vouchers for coffee shop purchases, showed the currency’s effectiveness in controlled tests, according to

. Eddie Yue, HKMA’s chief executive, mentioned that these pilot stages have yielded important feedback, allowing the authority to fine-tune its strategy before a potential retail launch, as reported by Crypto.News.

The HKMA is also preparing to introduce a set of unified tokenization standards to support the e-HKD’s integration into the digital economy. These guidelines are designed to create a foundation for programmable digital money, promoting compatibility and scalability for future uses, as detailed by Crypto.News. This initiative fits within Hong Kong’s broader ambition to become a leading center for digital assets, even as mainland China has recently halted stablecoin initiatives due to concerns about capital outflows and systemic risks, as referenced in

.

Although the timeline for retail adoption depends on global trends and market interest, the HKMA has already observed initial uptake in wholesale scenarios. Financial firms have started utilizing the e-HKD for tokenized asset settlements and international trade, reinforcing Hong Kong’s position as a connector between East and West, according to the Lookonchain report. The authority’s gradual rollout demonstrates a careful yet progressive approach, balancing new developments with regulatory caution.

On the international stage, the e-HKD’s progress is unfolding amid growing competition in the digital currency sector. The U.S. government’s strong push for digital asset innovation has prompted China to speed up its own digital currency projects, with blockchain-based money increasingly seen as a “covert front in global power struggles,” as noted by Yahoo Finance. In contrast, Hong Kong’s approach emphasizes institution-driven advancements—such as tokenizing government bonds and introducing regulated stablecoins for trade—to manage risks while leveraging its strategic advantages, Yahoo Finance reported.