The Hong Kong Financial Authority introduced its accomplished Aurum retail central commercial enterprise institution digital forex (CBDC) epitome on Oct. 21. The system, developed on side the Financial institution for Worldwide Settlements (BIS) Innovation Hub, has a singular construction that displays the intricacies of the prevailing system for issue cash Hong Kong.

Aurum consists of a wholesale interbank system and retail e-wallet. The e-wallet is created at a neighborhood commercial enterprise institution and has a smartphone interface. A validator system prevents commercial enterprise institution over-issuance and soul double redemption.


Hong Kong Unveils Accomplished Retail CBDC Challenge That Has A CBDC-backed Stablecoin
Hong Kong Unveils Accomplished Retail CBDC Challenge That Has A CBDC-backed Stablecoin

The

intermediated retail

CBDC is used inside the e-wallets, and CBDC-backed stablecoins are used inside the interbank system. The freakish CBDC-backed stablecoins digitally mirror Hong Kong's current forex system, wherein commercial enterprise institution notes are issued by three medium of exchange establishments and backed by the central commercial enterprise institution. The CBDC is a direct legal responsibility of the central commercial enterprise institution, whereas the stablecoins are liabilities of the issue commercial enterprise institution, with backing property held by the central commercial enterprise institution. The authors acknowledged:

"Bringing CBDC-backed stablecoins to life has not by a blame sigh been achieved earlier than and we afterwards felt that doing so power complement the rising physique of analysis on non-public sphere stablecoins. Certainly, what distinguishes Aurum from non-public sphere stablecoins is that Aurum's stablecoin balances are reconciled, versus actual time gross settlement (RTGS) balances of the issue commercial enterprise institution with the central commercial enterprise institution."

The excessive degree of decoupling between the wholesale and retail ledgers offers the system a excessive degree of cyber-resilience, the designer mentioned.

Retail dealings are carried out with aliases. Solely the middleman that performs Know Your Buyer features can see the id of customers. Unspent dealing output information are accustomed trace digital forex possession anonymously by means of a number of dealings as a

security measure

in case of economic commercial enterprise institution chapter.

Hong Kong launched its CBDC analysis in June 2021 as a part of its complete Fintech 2025 Technique. The commercial enterprise authority is pursuing retail and

wholesale CBDC

implementation individually. It notable earlier that the retail CBDC has no "imminent function" to play inside the cash hand market, yet use instances power emerge rapidly. Aurum is the primary challenge accomplished by the BIS Innovation Hub.