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Digital currencies
BusinessBanking & Finance

Explainer | As Hong Kong explores how e-HKD can be used for shopping and dining in the city, here are some key facts on how digital currencies work

  • The e-HKD could be safer than cash as its user identity can be traced, a senior banking adviser says
  • Still, news users of digital currency may be deterred by privacy and security concerns, experts say

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The Hong Kong Monetary Authority (HKMA) is exploring a digital currency called e-HKD. Photo: Shutterstock
Enoch YiuandGeorgina Lee

The Hong Kong Monetary Authority (HKMA) is exploring a digital currency called e-HKD that will allow the public to use this form of electronic payment to shop, dine or make money transfers.

The authority first mentioned the plan in June as part of Fintech 2025, its fintech plan for the next four years. The de facto central bank earlier this month issued a 50-page white paper called “e-HKD: A technical perspective” as a first step to explore infrastructure for the currency.

After a period of more study, the HKMA should be in a position by mid-next year to decide if it will go ahead with the e-HKD plan, bringing Hong Kong a step closer to becoming a cashless city. Here is what you need to know about the digital currency:

What is e-HKD? Why does Hong Kong need to introduce it?

The e-HKD is a retail-focused digital currency equal to an electronic version of banknotes. The user will need a mobile wallet app to keep and use the currency for shopping, dining or transferring money.

Under one of the proposals, the central bank will issue the digital money at the wholesale level with banks, while the banks and other payment companies will distribute the e-HKD to retail customers.

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