CBDCs Can Offer A Cost-effective Way Of Transactions, Hong Kong Official Says

Global central bank governors are now meeting in Thailand to debate the role of central banks in the face of developing financial technology, which includes central bank digital currencies (CBDCs) and stablecoins.

Eddie Yue, chief executive of the Hong Kong Monetary Authority, participated in a panel discussion on digitalized monetary systems and discussed the rise of digital assets, CBDC, and the risks associated with the new technology.

The Hong Kong Authority’s chief executive technology officer emphasizes the monetary innovations and benefits of blockchain, as well as its potential influence on central banks.

Yue that in the long run, CBDCs and stablecoins will provide a more efficient and cost-effective transaction method. However, he added that there are dangers connected with every new technology, whether it is related to innovation or operational concerns.

Yue pointed out that because blockchain is a decentralized technology by definition, mitigating on-chain risks are significantly more difficult. This is why regulators should concentrate on the off-chain activity.

He also revealed that the Hong Kong government is developing separate regulations to align with international consensus on stablecoin regulation.

Changyong Rhee, governor of the Bank of Korea, Adrian Orr, governor of the Reserve Bank of New Zealand, and Cecilia Skingsley from the Bank for International Settlements were also present at the conference.

The Bank of Thailand (BOT) and the Bank for International Settlements (BIS) are co-hosting the conference.

In September, Wai-Man said the HKMA would conduct a series of trials of its central bank digital currency under testing, the e-HKD, with banks and technology businesses in the fourth quarter of this year. The HKMA modified the CBDC launching roadmap, indicating that it intends to initially establish a wholesale e-HKD platform for testing and researching use cases before the final public launch.

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