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Visa Tests Tokenized Deposits for Hong Kong’s CBDC with HSBC, Hang Seng Bank

2 mins
Updated by Kyle Baird
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In Brief

  • Visa, in collaboration with HSBC and Hang Seng Bank, has tested tokenized deposits for Hong Kong's CBDC, highlighting its benefits.
  • The CBDC pilot is not just showcasing digital dollar use cases but also how it can revolutionize the nation's payment system.
  • Visa sees tokenization technology as a key factor in bridging banks and cryptocurrencies, transforming interoperability in the industry.
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Global payment company Visa has revealed the outcomes of tokenized deposits for the central bank digital currency (CBDC) of Hong Kong through a collaborative effort with two major banks.

It was stated that HSBC and Hang Seng Bank participated in the test simulation.

Hong Kong’s CBDC Pilot Benefits Economy

In a recent statement, Visa highlights the advantages that the CBDC pilot program in Hong Kong offers to both the company and the nation.

“The HKMA’s pilot program provides Visa with a great opportunity to continue to leverage our strengths, promote payment innovation, and test new forms of money flow in collaboration with partners.”

This comes after BeInCrypto recently reported that Hong Kong contemplated the development of its CBDC for retail usage. On June 9, an external report suggested that authorities aimed to have one prepared for implementation when the need arises.

Learn more: 5 Best Platforms To Borrow Against Crypto in 2023

Visa believes the CBDC pilot shows digital dollar applications and a way to revolutionize the national payment system.

“Not only providing reference value for the hypothetical digital Hong Kong dollar but also contributing to shaping the future development of the payment ecosystem.”

Countries experimenting or piloting CBDCs. Source: Business Wire
Countries experimenting or piloting CBDCs. Source: Business Wire

Hong Kong Explores Digital Asset Boundaries

Furthermore, Visa discussed tokenization technology as a significant factor that will bring together banks and cryptocurrency in the coming years.

“Tokenization technology is expected to bring new opportunities to the industry in the coming years, with increasing attention from the financial industry due to the potential transformation of interoperability between banks and digital assets.”

Hong Kong has been actively studying CBDC uses and benefits in the country.

On September 13, BeInCrypto reported that Hong Kong, in partnership with the Bank for International Settlements (BIS) and Israel’s central bank, conducted experiments with retail central bank digital currency (rCBDC) to improve digital payments as a public service.

The report indicated that a careful design of the CBDC’s structure could eliminate cybersecurity risks when using rCBDCs.

Learn more: Digital Rupee (e-Rupee): A Comprehensive Guide to India’s CBDC

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.