Visa Completes Digital Hong Kong Dollar Pilot Test with Local Banks

Visa has triumphantly concluded the Central Bank Digital Currency (CBDC) Pilot Programme, in partnership with the Hong Kong Monetary Authority, HSBC, and Hang Seng Bank. The program centered on the innovative concept of deposit tokenization, whereby deposited funds are transformed into digital tokens on a bank’s blockchain ledger, backed by the institution’s balance sheet.

One of the most notable findings from the pilot is that interbank transfers witnessed nearly real-time final settlement. Tokenized deposits were seamlessly processed, with deposits being ‘burned’ on the sending bank’s ledger, ‘minted’ on the receiving bank’s ledger, and then interbank settlement was executed via a simulated wholesale CBDC layer.

Another noteworthy achievement is that Visa’s blockchain-based platform operated 24/7. This impressive feature stands in stark contrast to traditional payment systems that are often limited to certain hours and are inactive during weekends and holidays.

In addition to these accomplishments, Visa highlighted that all transactions during the pilot were conducted with top-notch encryption. This security feature allowed for the public visibility of transactions on blockchain explorers while simultaneously safeguarding the identity of participants, their balances, and specific transaction amounts from non-bank users.

Moving forward, Visa has exciting plans to explore tokenized asset markets and programmable finance in the next phase. For instance, the “Property Payments” use case aims to automate the transfer of remaining balance tokens from a buyer to a property developer upon reaching the completion date of the contract, significantly reducing the time it takes to finalize the transaction.

With these successful results, the e-HKD Pilot Programme is now set to enter its next phase, paving the way for further innovation and exploration of digital currency solutions.

By Urik

My professional background is in public relations and I am the founder of Cryptochating. My journey into blockchain technology started four years ago, and I haven't looked back since then. The future of decentralized technology is incredibly fascinating to me, and I am passionate about communicating how it will change the world.

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