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In a notable development, the Hong Kong Monetary Authority (HKMA) has joined hands with five local universities to establish a Central Bank Digital Currency (CBDC) Expert Group. This collaborative endeavour, marked by the signing of a Memorandum of Understanding (MoU), underscores a strategic alliance aimed at exploring and addressing key policy and technical issues related to CBDC.
The five universities participating in this initiative are The Hong Kong Polytechnic University (PolyU), The University of Hong Kong (HKU), the City University of Hong Kong (CityU), The Chinese University of Hong Kong, and The Hong Kong University of Science and Technology.
The primary objective of the CBDC Expert Group is to facilitate interdisciplinary discussions and gather expert insights from various technical, analytical, and academic perspectives on CBDC. This partnership highlights the crucial role that financial technology (fintech) and CBDC play in Hong Kong’s development landscape.
Prominent representatives from the academic and financial sectors, the Dean of the Faculty of Engineering at PolyU, and the Executive Director (Financial Infrastructure) of HKMA formalised the partnership through the signing of the MoU. Their shared goal is to advance fintech and CBDC research and development in Hong Kong through collaborative efforts and knowledge exchange.
This collaboration spans a wide array of CBDC-related topics, with PolyU and HKMA leveraging their respective expertise and resources. The CBDC Expert Group will serve as a platform for knowledge exchange, sharing insights, and exploring innovative solutions in CBDC and other emerging fintech domains. Distinguished members of this group expressed their enthusiasm about contributing pioneering research that addresses privacy and security challenges while fostering public trust in CBDC.
Meanwhile, The University of Hong Kong (HKU) has also partnered with HKMA in the CBDC Expert Group, with five faculty members lending their expertise to the endeavour. These faculty members have collaborated with their peers to produce two white papers.
The first paper delves into privacy concerns associated with CBDCs and explores the integration of privacy-enhancing technologies (PETs) into a CBDC platform. The second paper focuses on the interoperability of CBDC platforms, considering various frameworks, technologies, and implementations, including blockchain technologies and associated standards.
In a statement, the Associate Vice-President (Faculty Affairs) and Associate Dean (Research and Knowledge Exchange) of HKU Business School, emphasised the pivotal role of CBDCs in shaping Hong Kong’s financial future, positioning them as a cornerstone for modernizing and strengthening the city’s financial foundations.
The Dean of Engineering at CityU expressed enthusiasm for joining the CBDC Expert Group and highlighted the importance of working alongside HKMA to address key policy and technical issues in CBDC research.
The CBDC Expert Group, comprising experts from diverse academic disciplines, aims to facilitate collaboration and knowledge exchange between the HKMA and academia concerning CBDC research. It has already commenced work on two research papers, addressing privacy concerns and interoperability issues related to CBDCs.
This collaborative effort signifies a significant stride in the realm of financial technology, with a focus on CBDC, as Hong Kong continues to position itself as an international financial hub.
As the partnership between HKMA and these prestigious local universities takes shape, the implications for the development of CBDCs are profound. The collaboration promises to provide a unique platform where technological innovation, policy formulation, and academic research converge to drive the evolution of CBDCs.
The establishment of this CBDC Expert Group highlights the growing recognition of the transformative potential of CBDCs in the financial landscape of Hong Kong. These digital currencies have the capacity to reshape traditional financial systems and play a pivotal role in the modernization of the financial sector.
Furthermore, the inclusion of five diverse universities in this collaborative effort underscores the holistic approach taken towards CBDC research. With experts from various fields, including business, computer science, economics, finance, and law, coming together, the group aims to tackle the multifaceted challenges associated with CBDC implementation. Privacy concerns, security challenges, interoperability issues, and legal and regulatory considerations are all on the agenda.
The significance of this partnership extends beyond the immediate development of CBDCs. It also serves as a testament to the growing importance of fintech in the global financial landscape. As the world increasingly embraces digital financial solutions, collaboration between academic institutions and financial authorities is essential to drive innovation, address challenges, and ensure the long-term success of these technologies.
