A government official for Hong Kong’s de facto central bank has said that there are no plans for it to issue a central bank digital currency (CBDC).

Joseph Chan, Acting Secretary for Financial Services and the Treasury at the Hong Kong Monetary Authority (HKMA), was speaking at a council meeting with legislators yesterday when the announcement was made. Chan was answering a question regarding the cryptocurrency market and the fact that it was reported that the People’s Bank of China (PBoC) is to issue a statutory digital currency. This then raised the possibility of whether Hong Kong would issue its own.

Chan replied by saying:

“The HKMA has carried out research on CBDC. At the same time, the HKMA notes that the benefits of CBDC and its efficiency gains will depend on the actual circumstances of a jurisdiction. In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.”

Chan went on to say that the nature of holding and transacting with digital currencies can lead to potential money laundering and terrorist financing risks. However, while the HKMA will continue to promote financial innovation, the acting secretary stated that the central bank will maintain its position ‘to protect the interest of the investing public.’

He also brought up the topic of initial coin offerings (ICOs). At a G20 meeting held at the end of March discussions took place over the risks and related issues with cryptocurrencies. Chan added that the meeting ended with an agreement that there was a need to closely monitor the market.

“We will continue to monitor the development of ICOs and “cryptocurrencies” in Hong Kong, and maintain close contacts with regulators in other jurisdictions through active participation in meetings of relevant international organisations, such as the International Organization of Securities Commissions and the Financial Stability Board,” he added.

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