Payments processor Visa has completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) pilot program with HSBC and Hang Seng Bank.
According to reports on November 1 announcementThe e-HKD initiative involves the tokenization of deposits, whereby funds deposited with a bank are minted on the company’s own blockchain ledger, backed by its balance sheet. In its key findings, Visa wrote:
“Confirmed through our pilot testing between banks, the final settlement time for bank-to-bank transfers is close to instantaneous. Tokenized deposits are burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously passed through Interbank settlement simulates a wholesale CBDC layer.”
Additionally, Visa said during the pilot that its platform was able to operate 24/7, superior to traditional payment systems that cannot operate after hours or on weekends.
“Our testing was completed using globally available blockchain networks, with support from teams in other time zones,” the company wrote. Meanwhile, tokenized deposits are transacted via crypto, allowing for transactions on the blockchain View them on a browser, but the identity of the participants, balances or transaction amounts will not be revealed to non-bank users.
As for next steps, the payment processor said it is exploring tokenized asset markets and programmable finance. “For example, in the pilot’s “Real Estate Payments” use case, a buyer’s payment to transfer remaining balance tokens to a real estate developer could be automatically completed up to the contract’s completion date, minimizing the lag time for the end of the process,” Visa wrote. The electronic Hong Kong dollar pilot project will enter the second phase after its success.
Related: Visa to invest $100 million in artificial intelligence
Svlook
