In the midst of questions about Hong Kong’s viability as a global finance hub, Hong Kong authorities (including Financial Services and the Treasury Bureau chief Christopher Hui Ching-yu) have announced an intention to turn the city into a hub for cryptocurrency business. Thus far, the Hong Kong government has signaled that it will begin to issue green bonds through the blockchain, and will roll out the e-HKD, a central bank digital currency backed by Hong Kong financial regulators.
The e-HKD follows a 2017 effort by Hong Kong authorities to explore the possibility of issuing a digital currency. Issuing such a currency may help Hong Kong re-establish or preserve its role as a center of global finance, putting Hong Kong on the forefront of debates about the use and regulation of digital currencies. However, the prospect of Hong Kong’s independence from mainland China looms over the announcement of the e-HKD, with US analysts noting the possibility of data privacy and cybersecurity issues.