The Hong Kong Monetary Authority‘s digital currency pilot program was helmed by Visa and a couple of other banks, which came to an end recently.
Payments corporation Visa teamed up with Hang Seng Bank and HSBC to complete Hong Kong’s digital currency pilot. The first phase of the pilot program of the central bank digital currency (CBDC) wound up successfully. Meanwhile, Visa published a press release noting their activities and findings with the program.
The pilot test mainly involved scrutinizing tokenized deposits via CBDCs. Earlier in 2023, the Hong Kong Monetary Authority had selected Visa for the program. The key goal of the test was to check the feasibility and interoperability of tokenized deposits. Cross-chain and inter-bank B2B self-transactions were planned for the deposits’ atomicity.
The inter-bank B2B transactions also included settlements between merchants and payment institutions and property payments. The test further highlighted the benefits of B2B payment tokenization. The benefits included settlement risk management and control, transparency, speed, and resilience of payments and others.
“The time to final settlement for an interbank transfer, as confirmed through our pilot’s testing between the banks, was near real-time. Tokenized deposits were burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer,” said Visa.
Blockchain explorers could view the tokenized deposit transactions but not sensitive details like identities, transaction amounts, or balances. It was because the transactions were encrypted while the testing occurred with existing blockchain networks. Visa has stated it would explore programmable finance and tokenized asset markets next.
The next stage of the Hong Kong Monetary Authority’s CBDC program will commence soon. Visa, on the other hand, has been working on various aspects of blockchain and crypto. It recently shed light on crypto cards while working stablecoins concurrently.