The movement of money is entering a new era. Innovations in payments are happening at all levels, led by the private sector alongside leading public institutions. Central banks and regulators are exploring new technological innovations and regulatory frameworks on a macro level. In parallel, solutions from the private sector continue to emerge, solving existing pain points and innovating around previously unattainable use cases. Public-private partnerships have become an essential mechanism to unlock the feasibility of groundbreaking improvements to payments and money movement.
🏦 The Hong Kong Monetary Authority (HKMA) has been a longstanding leader of research into the applications of Central Bank Digital Currency (CBDC), as part of its broader “Fintech 2025” strategy. In 2023, the HKMA commenced the e-HKD Pilot Programme to explore the use case of e-HKD as a new form of digital currency in Hong Kong. In response to HKMA’s calls for industry participation, Visa approached commercial banks to pilot the issuance of “tokenized bank deposits,” a form of commercial bank money issued on a distributed ledger that businesses and consumers could use to make payments and interact with other blockchain networks and their participants.
🌟 Learning from the successes of the Hong Kong Monetary Authority (HKMA) pilot and from similar projects around the world, Visa’s tokenization solution for digital assets is designed to leverage the full extent of blockchain tokenization technology as well as programmable smart contracts to enable depository institutions to provide enhanced business operations and payment experiences for their customers. Visa envisions its solution to be the engine that drives the new standard for blockchain-based payments, creating a future where customers and businesses around the world will experience improved money movement and programmable payments that are powered by blockchain tokenization technology.
