According to Foresight News, the Hong Kong Monetary Authority (HKMA) launched a pilot program for the digital Hong Kong Dollar (eHKD) in May this year, testing its potential use cases. A cross-industry alliance led by Hong Kong Telecom (06823), Zhongan Bank, and Boston Consulting Group (BCG) has completed a pilot test for 'tokenized property collateral loans' and will submit a pilot plan to the HKMA by the end of this month. A white paper will be released after Hong Kong Fintech Week. The alliance stated that the overall test process went smoothly and believes the program will help reduce transaction costs and speed up the lending process. The cross-industry alliance also includes VSFG and paywith.glass.
According to the process design, users need to first open an account in the 'Simulated Digital Hong Kong Dollar' e-wallet provided by HKT Payment, a subsidiary of Hong Kong Telecom. They then apply for tokenization of their assets (in this case, property) through the VSFG interface within the app. After obtaining the property tokens, users can use a portion of the tokens to apply for collateral loans at Zhongan Bank. The funds are then disbursed and paid through HKT's e-wallet. However, the loans currently disbursed can only be used for pre-specified purposes, such as education and medical expenses, to more effectively manage credit risk.
