Bank of China Hong Kong to explore e-HKD payment programmability

BOCHK will work with a subsidiary of Sun Hung Kai Properties.

Bank of China (Hong Kong) (BOCHK) is working with the Hong Kong central bank to explore programmable features of the digital Hong Kong dollar (e-HKD) for payment and funds earmarking scenarios.

BOCHK will use its blockchain infrastructure in the phase 2 of the Hong Kong Monetary Authority’s e-HKD Pilot Programme, using blockchain technology to explore e-HKD’s programmable features for payment use cases.

In phase 2, the bank will create unique digital identities for customers and issue standardised e-HKD for cross-institutional uses during the study.

The use of smart contracts will enable transactions to be automatically executed when predetermined conditions are met, which will in turn facilitate the development of a decentralised finance, the bank said.

BOCHK will work in collaboration with Sanfield (Management) Limited, a wholly owned subsidiary of Sun Hung Kai Properties, alongside other partners to delve deeper into application scenarios of the programmable features of digital money.

Separately, BOCHK welcomed the expansion of Project e-HKD, which has been renamed as Project e-HKD+ that aims to extend the research focus from e-HKD to a comprehensive digital money ecosystem. 

HKMA first announced the e-HKD Pilot Programme in May 2023, with phase 1 ending in October of the same year.

BOCHK also participated in phase 1, where it tested the programmability of digital money by completing a trial of the e-HKD prepayment service. 

Under phase 1, customers’ funds were automatically disbursed in accordance with the contract terms  established by the merchant. In the event that the merchant fails to honour the contract, remaining funds can be refunded to the customer.