Oliver Wyman – Envisioning Programmable Payments in Hong Kong

Central banks around the world are exploring the concept of central bank digital currencies (CBDCs) to enhance efficiency and transparency in transactions. In Hong Kong, the Hong Kong Monetary Authority is piloting an e-HKD as part of its "Fintech 2025" strategy to enable programmable payments. The pilot programme involves collaboration with industry players, like Hang Seng Bank, to test the effectiveness of an e-HKD in various use cases such as government grant disbursement, merchant reward programme, and peer-to-peer transfers. Feedback from the pilot programme highlights three strategic implications for the potential adoption of an e-HKD: enabling wider adoption of retail payments, empowering small businesses to use digital payment features, and requiring clear incentives for adoption by individuals and businesses. Key enablers for the successful implementation of an e-HKD include a collaborative participation model, accessible and user-friendly programmability features, and an innovation-friendly platform. While non-technical factors like business norms may influence the uptake of an e-HKD, the pilot shows potential benefits for individuals, merchants, and government organisations. Collaboration between the public and private sectors is crucial to further explore the benefits of an e-HKD and establish the necessary frameworks for its implementation in Hong Kong.