A wholesale central bank digital currency (CBDC) could become the instrument that underpins different forms of digital money, said Eddie Yue, chief exec of the Hong Kong Monetary Authority (HKMA), in a recent speech.
“In a way, we already have a wholesale central bank-issued digital currency today, which are the banks’ reserves in our Real Time Gross Settlement (RTGS) system. While synchronization of ledgers achieved via enhancements to RTGS could theoretically deliver atomic settlement, we consider it important to explore a tokenized version of RTGS could support the growing market of tokenization,” he said.
HKMA announced the development of a wholesale CBDC sandbox under Project Ensemble last month, with the goal of exploring the technical viability of interbank settlement functionality between different institutions that have developed their own ledgers and systems for tokenized assets.
“We want to maintain the ability for wholesale financial transactions to settle in central bank money, the safest form of money,” he said. “This wholesale CBDC could potentially forge a new financial market infrastructure that bridges the existing gap between different forms of digital money, including a retail CBDC, regulated stablecoins, and tokenized deposits.”