Ripple will participate in the Hong Kong Digital Dollar (e-HKD) central bank digital currency (CBDC) pilot program of the Hong Kong Monetary Authority (HKMA) showing a real estate asset tokenization solution. The company will present at the same time its new CBDC Platform.
Ripple will partner with Fubon Bank of Taiwan and other entities to demonstrate the release of capital with tokenized assets using a retail version of the CBDC e-HKD. Equity release, also known as a reverse mortgage, is the practice whereby a lender allows a homeowner access to the equity in their home, with payment only being made when the home is sold or the borrower dies.
Tokenization can reduce friction in the capital release process and speed up performance for banks, Ripple said in a statement. The company is participating in the so-called second tranche of the program, which will “dig deeper into use cases, as well as application, implementation and design issues related to e-HKD,” according to the HKMA.
“Our regulations will be tight”
Hong Kong Monetary Authority Chief Executive Eddie Yue explains what crypto companies should expect under a new licensing regime https://t.co/C6nWnRKtsU pic.twitter.com/hgpJr2mkjY
—Bloomberg TV (@BloombergTV) May 9, 2023
“Experiences arising from the Rail 2 pilot projects will be taken into account in any decision by the HKMA to launch an e-HKD at a later date (Rail 3)”, told Cointelegraph James Wallis, Ripple’s vice president for central bank and CBDC engagements, in a written interview.
The pilot project will run on Ripple’s new CBDC product – the Ripple CBDC Platform – using a new private ledger powered by XRP Ledger and enhanced functionality, including offline transactions and smartphone-free use. Furthermore, Wallis added:
“All of the pilot program partnerships that Ripple previously announced, including Montenegro, Palau, and Bhutan, will take advantage of the CBDC Platform.”
Hong Kong started its investigation into a CBDC in 2017. “While it appears that e-HKD may not have an imminent role in today’s retail payment market, we believe that prospective use cases for e-HKD may quickly emerge,” concluded the HKMA in a recent document.
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