VICTORIA CITY, HK – Banks in Hong Kong are exploring the development of a central bank digital currency (CBDC), with at least one bank eyeing the creation of the e-HKD on a permissioned blockchain. 

Unlike China’s government-controlled e-CNY, Hong Kong’s CBDC architecture is left to the banks to determine its design and operation. However, whether the e-HKD will be issued on a permissionless or permissioned blockchain has significant implications for privacy and security.

If issued on a permissionless chain, the authorities cannot seize assets held in a self-custody wallet, whereas asset seizure is possible on a permissioned chain. Hong Kong is a predominantly cash-based society and has not yet said whether the public will have a say in the development of the e-HKD, despite issuing a policy design paper last year to solicit feedback.