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Payment processor Visa has completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) Pilot Programme in collaboration with HSBC and Hang Seng Bank.
According to an announcement on November 1, the e-HKD Programme involves the tokenization of deposits, where money deposited with a bank is minted on the firm’s own blockchain ledger, backed by its balance sheet. In its key findings, Visa stated:
“The time to final settlement for an interbank transfer, as confirmed through our pilot’s testing between the banks, was near real-time. 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.”
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Additionally, Visa noted that its platform operated 24/7, outperforming traditional payment systems that typically cease operations after hours or on weekends.
“Our testing was completed using blockchain networks that were available globally and supported by teams in other time zones,” the firm wrote. Meanwhile, the tokenized deposits were transacted through encryption, allowing them to be viewed on blockchain explorers without revealing the identity of participants, balances, or transaction amounts to non-bank users.
Looking ahead, the payment processor is exploring tokenized asset markets and programmable finance. “For example, 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, minimizing lag time in the closure of the process,” Visa wrote. Following these successful results, the e-HKD Pilot Programme will enter phase two.
Related: Visa to invest $100M in generative AI
