e-HKD Pilot Program
Ripple Inc., a leading provider of blockchain technology, joined the Hong Kong Monetary Authority (HKMA)’s “e-HKD Pilot Program” together with Fubon Bank on the 18th to develop a use case for real estate asset tokenization. announced to expand.
The digital currency e-HKD (Digital Hong Kong Dollar) is Hong Kong’s central bank digital currency (CBDC) for retail. HKMA is working with a number of banks and technology companies to develop e-HKD, envisioning online, in-store and face-to-face payments.
The pilot program aims to explore potential use cases in six categories, including programmable payments, tokenized deposits, Web3 transaction payments, and tokenized asset payments. The program will involve 16 financial, payment, and technology companies, including Ripple, to work with industry experts to conduct in-depth verification of e-HKD’s practical application, implementation, and design.
As part of this program, Ripple will leverage its CBDC platform and a private version of the XRP Ledger (XRPL) to provide real estate asset tokenization capabilities. This will enable the issuance and distribution of e-HKD and real estate tokens, as well as lending functions.
Ripple plans to conduct a demonstration experiment in cooperation with Fubon Bank (Hong Kong), a wholly owned subsidiary of Taiwan’s largest financial holding company, Fubon Financial Holdings.
James Wallis, Vice President of Central Bank Engagements and CBDC at Ripple, commented:
“There are many regulators in the Asia-Pacific region who are willing to use blockchain technology. It is a great honor for Ripple to be selected for this pilot program. We are confident that this will be the industry’s first initiative to demonstrate the potential of asset management.
What is the XRP Ledger
XRPL is an open-source, energy-efficient, decentralized blockchain that has been the blockchain of choice for providing payment and liquidity for tokenized assets for over a decade. It uses a consensus algorithm called the Ripple Protocol Consensus Algorithm (RPCA) to validate and agree on transactions, eliminating the need for a central authority. In addition, it promotes high-speed, safe and low-cost transactions as the underlying technology that supports the virtual currency XRP.
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Tokenization of real estate assets
Tokenization of real assets is projected to be a trillion-dollar market by 2030, according to Boston Consulting Group. Tokenization of assets, especially real estate, has emerged as an important use case for the financial services and government sectors.
Real estate is one of the major assets that can appreciate in value over time, but it’s now a heavy burden to capitalize on that appreciation. However, the use of blockchain technology such as Ripple’s CBDC platform and XRP Ledger (XRPL) will enable Hong Kong residents to manage their assets more quickly and efficiently, and banks will also improve loan turnover and payouts. Ripple claims that it can expect diversification of methods.
At the opening ceremony of the e-HKD pilot program on the 18th, the Hong Kong Monetary Authority (HKMA) announced its policy of “working closely with various stakeholders to roll out a series of pilot programs.” made it The pilot program aims to explore specific implementation and design challenges as well as e-HKD use cases. The Hong Kong Monetary Authority plans to announce future progress at the Hong Kong Fintech Week in November 2023.
Ripple has been selected to showcase a key CBDC use case for the @hkmagovhk‘s inaugural e-HKD Pilot Program with Fubon Bank.
Learn how property owners can leverage a combination of CBDCs & tokenized real estate to unlock the equity in their real estate: https://t.co/kkRvtJ9Zb9 pic.twitter.com/2ePmvWreCD
— Ripple (@Ripple) May 19, 2023
The ceremony was attended by several companies, including Ripple. The e-HKD pilot program includes Alipay Financial Services, Bank of China, China Construction Bank, Fubon Bank, Ripple Labs, Standard Chartered Bank, Visa, Mastercard Asia/Pacific, Boston Consulting Group And so on, heavyweights from various fields are listed.
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