Visa completes e-HKD CBDC trial with HSBC and Hang Seng
Hong Kong is one step closer to a central bank digital currency (CBDC) with the release of its successful e-HKD phase 1 results in collaboration with Visa, HSBC, and Hang Seng Bank.
According to the November 1 announcement, Visa said that it achieved “near real-time” finality with transfers involving tokenized deposits of the digital Hong Kong dollar (e-HKD).
“Tokenized deposits were burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer,” the payments firm wrote.
“This would provide for settlement in an atomic manner with better streamlining of any operational dependencies imposed by financial institutions and other intermediaries, thus improving liquidity management.”
The payment processor also stated that its e-HKD test pilot was functional 24/7, surpassing the uptime of traditional financial systems, which typically don’t function after hours or on weekends. In addition, the firm wrote that “tokenized deposits can be fully transacted while remaining encrypted, without revealing information about identity, balances, or transaction amounts to non-bank users.”
For its next steps, Visa plans to explore the use of e-HKD in tokenized asset markets and programmable finance to automate real estate transactions. “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 closure of the process,” the company said. Other areas of research interest include expansion of retail solutions and digital cross-border payments.
Despite the promising results, no definite timelines have been given for the full launch of the e-HKD CBDC, or even that such a launch will occur. In its October 30report, the Hong Kong Monetary Authority warned there are still issues to resolve:
“For instance, an rCBDC issued as a programmable money may be more susceptible to cybersecurity risks, as it may present more mediums for external threats to inject malicious code.”
With the silent nod from Beijing’s Central Government, Hong Kong has been striving to become a Web3 hub for blockchain in the Asia-Pacific Region. However, such efforts had been overshadowed by the collapse of the JPEX crypto exchange, resulting in losses exceeding $150 million for Hong Kong investors. Since the incident unfolded, trust in cryptocurrency among local residents has fallen drastically.
The new e-HKD pilot results as announced by Visa.
Hashkey’s regulated exchange token
Hashkey, one of the first crypto exchanges to receive a regulatory license in Hong Kong, will introduce an exchange token in 2024.
According to therecentwhitepaper, the “HashKey EcoPoints” (HSK) token will be minted on Ethereum with a total supply of 1 billion. Out of this amount, 65% is reserved for users, 30% for Hashkey staff, and 5% for its ecosystem treasury.
The token will be distributed as incentivizes to ecosystem users and distributors and will not be “sold via private or public sales for fund raising purposes.” As for utility, the company states that the token could be used to settle trading fees, along with early access to future token subscriptions and product upgrades on its exchange services.
The exchange also pledges to buyback HSK tokens with up to 20% of profits generated from related Hashkey services. “HashKey implements an offsetting issuance mechanism (burning) to protect HSK holders from the dilutionary impact of rewards-based increases in HSK circulating supply,” the firm wrote. However, regulatory approval is still required for the token design plan:
“The contents of this whitepaper have not been reviewed by any regulatory authority in Singapore or Hong Kong. You are advised to exercise caution in relation to the information in this whitepaper and any transaction that you intend to carry out involving HSK.”
In August, Hashkey, alongside crypto exchange OSL, received one of the first regulatory licenses for retail crypto trading in Hong Kong. Its trading volume initially stagnated but has sincegainedtraction. Only select coins and tokens, such as Bitcoin, Ethereum, Tether, and Avalanche, are approved to be listed on the exchange.
Hashkey’s plan for HSK token utility.
$308M syndicate manipulated crypto markets to launder money: Police
Nineteen Chinese nationals have been sentenced for their role in a $308 million money laundering scheme involving cryptocurrencies between November 2020 and April 2021.
According to an October 31 report by the Chongqing Tongliang District People’s Court, Mr. Jiang and Mr. Deng, the principal conductors of the money laundering syndicate, together laundered a total of $308 million worth of Bitcoin and Tether for proceeds of crime related to online gambling and wire fraud.
Police say that to avoid platform monitoring and know-your-customer requirements, the accused individuals orchestrated a sophisticated scheme of using peer-to-peer transactions, where coins were sold at “unusual prices relative to spot markets” for stablecoin Tether and then transferred to exchanges for cash.
“By fabricating pretexts such as withdrawing project funds and migrant workers’ wages, they organized gang members to withdraw cash from bank counters in Chongqing, Sichuan, Shanghai and other provinces and cities. The amount of cash withdrawals ranged from hundreds of thousands to several million yuan each time. After withdrawing the cash, the cash is packaged in trolley cases, backpacks, etc., and transported by plane.”
The 19 individuals, including Mr. Jiang and Mr. Deng, were sentenced to six months to six years in prison. “In recent years, the phenomenon of criminals committing illegal and criminal activities through telecommunications networks has become increasingly rampant, posing a huge threat to the legitimate rights and interests of the general public,” the presiding judge wrote.
Due to such a rise in wire fraud involving cryptocurrencies, China’s Central Government has cracked down harshly on crypto-related activities in the country, although there have been some signs of relaxation as of late. Nevertheless, such enforcement actions have sometimes resulted in collateral damage for foreign investors using Chinese-based crypto services without criminal intent.
The culprits as they appeared for sentencing in Chongqing Tongliang District People’s Court.
Subscribe
The most engaging reads in blockchain. Delivered once a
week.
Zhiyuan Sun
Zhiyuan Sun is a journalist at Cointelegraph focusing on technology-related news. He has several years of experience writing for major financial media outlets such as The Motley Fool, Nasdaq.com and Seeking Alpha.
Sir Keir Starmer has said US-UK trade talks are “well advanced” ahead of tariffs expected to be imposed by Donald Trump on the UK this week – but rejected a “knee-jerk” response.
Speaking to Sky News political editor Beth Rigby, the prime minister said the UK is “working hard on an economic deal” with the US and said “rapid progress” has been made on it ahead of tariffs expected to be imposed on Wednesday.
But, he admitted: “Look, the likelihood is there will be tariffs. Nobody welcomes that, nobody wants a trade war.
“But I have to act in the national interest and that means all options have to remain on the table.”
Sir Keir added: “We are discussing economic deals. We’re well advanced.
“These would normally take months or years, and in a matter of weeks, we’ve got well advanced in those discussions, so I think that a calm approach, a collected approach, not a knee-jerk approach, is what’s needed in the best interests of our country.”
More on Donald Trump
Related Topics:
Downing Street said on Monday the UK is expecting to be hit by new US tariffs on Wednesday – branded “liberation day” by the US president – as a deal to exempt British goods would not be reached in time.
A 25% levy on car and car parts had already been announced but the new tariffs are expected to cover all exports to the US.
Jonathan Reynolds, the business and trade secretary, earlier told Sky News he is “hopeful” the tariffs can be reversed soon.
But he warned: “The longer we don’t have a potential resolution, the more we will have to consider our own position in relation to [tariffs], precluding retaliatory tariffs.”
He added the government was taking a “calm-headed” approach in the hope a deal can be agreed but said it is only “reasonable” retaliatory tariffs are an option, echoing Sir Keir’s sentiments over the weekend.
Please use Chrome browser for a more accessible video player
0:28
‘Everything on table over US tariffs’
Mr Trump will unveil his tariff plan on Wednesday afternoon at the first Rose Garden news conference of his second term, the White House press secretary said.
“Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it,” Karoline Leavitt said.
“The president will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades. He’s doing this in the best interest of the American worker.”
Please use Chrome browser for a more accessible video player
3:09
Trump’s tariffs: What can we expect?
Tariffs would cut UK economy by 1%
UK government forecaster the Office for Budget Responsibility (OBR) said a 20 percentage point increase in tariffs on UK goods and services would cut the size of the British economy by 1% and force tax rises this autumn.
Global markets remained flat or down on Monday in anticipation of the tariffs, with the FTSE 100 stock exchange trading about 1.3% lower on Monday, closing with a 0.9% loss.
On Wall Street, the S&P 500 rose 0.6% after a volatile day which saw it down as much as 1.7% in the morning.
However, the FTSE 100 is expected to open about 0.4% higher on Tuesday, while Asian markets also steadied, with Tokyo’s Nikkei 225 broadly unchanged after a 4% slump yesterday.
Kristin Smith, CEO of the US-based Blockchain Association, will be leaving the cryptocurrency advocacy group for the recently launched Solana Policy Institute.
In an April 1 notice, the Blockchain Association (BA) said Smith would be stepping down from her role as CEO on May 16. According to the association, the soon-to-be former CEO will become president of the Solana Policy Institute on May 19.
The association’s notice did not provide an apparent reason for the move to the Solana advocacy organization nor say who would lead the group after Smith’s departure. Cointelegraph reached out to the Blockchain Association for comment but did not receive a response at the time of publication.
Blockchain Association CEO Kristin Smith’s April 1 announcement. Source: LinkedIn
Smith, who has worked at the BA since 2018 and was deputy chief of staff for former Montana Representative Denny Rehberg, will follow DeFi Education Fund CEO Miller Whitehouse-Levine, leaving his position to join the Solana Policy Institute as CEO. According to Whitehouse-Levine, the organization plans to educate US policymakers on Solana.
With members from the crypto industry, including Coinbase, Ripple Labs, and Chainlink Labs, the BA has filed a lawsuit against the US Internal Revenue Service, challenging regulations requiring brokers to report crypto transactions. The group often criticized the US Securities and Exchange Commission under former chair Gary Gensler for its “regulation by enforcement” approach to crypto, resulting in steep legal fees for many companies.
Less than 48 hours after the Solana Policy Institute’s launch, it’s unclear what the group’s immediate goals may be for engaging with US lawmakers and advocating for the industry. The organization described itself as a non-partisan nonprofit group.
The most senior and long-serving civil servants could be offered a maximum of £95,000 to quit their jobs as part of a government efficiency drive.
Sky News reported last week that several government departments had started voluntary exit schemes for staff in a bid to make savings, including the Department for Environment and Rural Affairs, the Foreign Office and the Cabinet Office.
The Department for Health and Social Care and the Ministry of Housing and Local Government have yet to start schemes but it is expected they will, with the former already set to lose staff following the abolition of NHS England that was announced earlier this month.
Rachel Reeves, the chancellor, confirmed in last week’s spring statement that the government was setting aside £150m to fund the voluntary exit schemes, which differ from voluntary redundancy in that they offer departments more flexibility around the terms offered to departing staff.
Ms Reeves said the funding would enable departments to reduce staffing numbers over the next two years, creating “significant savings” on staff employment costs.
A maximum limit for departing staff is usually set at one month per year of service capped at 21 months of pay or £95,000.
More from Politics
Whitehall sources stressed the figure was “very much the maximum that could be offered” given that the average civil service salary is just over £30,000 per year.
Whitehall departments will need to bid for the money provided at the spring statement and match the £150m from their own budgets, bringing the total funding to £300m.
Please use Chrome browser for a more accessible video player
5:04
Spring statement 2025 key takeaways
The Cabinet Office is understood to be targeting 400 employees in a scheme that was announced last year and will continue to run over this year.
A spokesman said each application to the scheme would be examined on a case-by-case basis to ensure “we retain critical skills and experience”.
It is up to each government department to decide how they operate their scheme.
The voluntary exit schemes form part of the government’s ambition to reduce bureaucracy and make the state more efficient amid a gloomy economic backdrop.
The move could result in 10,000 civil service jobs being axed after numbers ballooned during the pandemic.
Ms Reeves hopes the cuts, which she said will be to “back office jobs” rather than frontline services, but civil service unions have raised concerns that government departments will inevitably lose skilled and experienced staff.
The cuts form part of a wider government agenda to streamline the civil service and the size of the British state, which Sir Keir Starmer criticised as “weaker than it has ever been”.
During the same speech, he announced that NHS England, the administrative body that runs the NHS, would also be scrapped to eliminate duplication and cut costs.