Visa concludes pilot testing of digital Hong Kong dollar with local banks

Friday 3 November 2023 08:06 CET | News

Visa has completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) pilot programme with HSBC and Hang Seng Bank.


The e-HKD programme involves tokenization of deposits, where the money deposited with a bank is minted on the firm’s own blockchain ledger with the backing of its balance sheet. As part of its key findings, Visa reported that the time to final settlement for an interbank transfer was near real-time. Tokenized deposits were burned on the sending bank’s ledger, minted in the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer.

Visa has completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) pilot programme with HSBC and Hang Seng Bank.

Visa's innovations in e-HKD CBDC pilot programme

In addition, Visa said during the pilot that its platform was able to function 24/7, besting traditional payment systems that would not operate after hours or on weekends. Their testing was completed using blockchain networks that were available globally and supported by teams in other time zones. Meanwhile, the tokenized deposits were transacted through encryption, allowing them to be viewed on blockchain explorers but not revealing the identity of participants, balances, or transaction amounts to non-bank users.

For the next steps, the payment processor says it’s exploring tokenized asset markets and programmable finance. For example, in this pilot’s ‘Property Payments’ use case, the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimising lag time in the closure of the process, according to Visa. The e-HKD pilot programme will enter Phase 2 following the successful results.

Previous news from Visa

In October 2023, Visa has introduced Visa AR Manager, a pilot service aimed at simplifying commercial virtual card acceptance for merchants and customers. The solution automates virtual card payments for suppliers, enhancing the payment experience for merchants and traders.

Visa AR Manager automates the virtual card transaction process, retrieving card account details, and streamlining authorisation and clearing steps for suppliers. The service provides timely reconciliation data for closing out invoices in the supplier’s ERP system. Initially available for pilot customers in November 2023, Visa plans to expand the service broadly 2024 to improve merchant friction with commercial payment acceptance.

More: Link

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: CBDC, digital assets, banks, payment processing, ERP
Categories: DeFi & Crypto & Web3
Companies: Hang Seng Bank, HSBC, Visa
Countries: Hong Kong
This article is part of category

DeFi & Crypto & Web3

Hang Seng Bank





Discover all the Company news on Hang Seng Bank and other articles related to Hang Seng Bank in The Paypers News, Reports, and insights on the payments and fintech industry:

Industry Events