Digital Currency Weekly is your concise roundup of the most critical central bank digital currency (CBDC) developments, focusing on policy updates, technological breakthroughs, and regulatory landscapes shaping the future of money.
Key Developments
1. Hong Kong to Issue Few Stablecoin Licenses Initially
Hong Kong Monetary Authority (HKMA) CEO Eddie Yue confirmed that stablecoin issuer licenses will carry stringent requirements, with only "a handful" approved in the initial phase. Applicants must demonstrate:
- Viable use cases beyond speculation
- Robust risk management frameworks
- Full compliance with AML/CFT regulations equivalent to traditional banks
The HKMA’s Stablecoin Sandbox helps align business models with regulatory expectations, though participation doesn’t guarantee licensing approval. 👉 Explore stablecoin regulations
2. PBOC Spearheads Global CBDC Standardization
China’s central bank reported major progress in international CBDC standardization through ISO technical committees:
- October 2024: Digital Currency Hardware Wallet Security Reference Model reached Committee Draft (CD) stage
- August 2024: Joint ISO working group formed to develop Terminology for Digital Currencies
- Key focus areas: Bluetooth/SIM payments, smart contracts, offline transaction capabilities
3. Hong Kong’s Digital Asset Declaration 2.0
The policy framework prioritizes:
- Stablecoin integration for cross-border trade settlements
- Tokenized asset pilots with HK$500M funding via Cyberport
- Public sector use cases like government disbursements using licensed stablecoins
4. Expert Perspectives on Currency Evolution
Wang Yongli (Shenzhen DHC Digital) emphasized:
"USD-pegged stablecoins exposed gaps in traditional FX systems. Digital yuan’s internationalization should leverage China’s digital ID infrastructure while engaging in global stablecoin markets."
5. Infrastructure Updates
Regional Adoption
- Changsha: 441B yuan ($61B) in cumulative digital yuan transactions
- Shanghai Metro: Full-network support for digital yuan hardware wallets
- Jiangsu Province: First provincial transport card system enabling instant CBDC top-ups
Institutional Progress
- Southern Power Grid: 386B yuan ($53B) transacted across 24 CBDC scenarios including green bonds
- EU Digital Euro: Launch scheduled for October 2025 with emphasis on financial inclusion
FAQ
Q: How does Hong Kong’s stablecoin regime compare to other jurisdictions?
A: It mirrors U.S. and EU requirements for full reserve backing and interest prohibitions but adds mandatory real-world use cases.
Q: What’s the timeline for China’s digital yuan global expansion?
A: No official roadmap exists, but PBOC increasingly participates in multilateral CBDC bridge projects while restricting private stablecoins domestically.
Q: Can digital yuan wallets function overseas?
A: Currently limited to pilot zones, though Shanghai’s transport integration signals future cross-border usability. 👉 Latest wallet compatibility details
Analysis: These developments signal accelerating institutionalization of digital currencies, with regulators balancing innovation control against market demands for efficient cross-border solutions. The diverging approaches (China’s state-centric model vs. Hong Kong’s regulated private sector participation) will test competing visions for money’s future.