Visa Completes Digital HK Dollar Pilot in Partnership with Local Banks
- Visa has completed pilot testing of the digital Hong Kong dollar in partnership with HSBC and Hang Seng Bank.
- It said that the money deposit is minted on its own blockchain ledger with the backing of its balance sheet.
- Its platform was capable of functioning 24/7 when compared to traditional payment systems.
- The deposits were tokenized and encrypted, maintaining a certain level of privacy for the customers.
The development of digital assets in Hong Kong is on the rise following the rise of a blockchain-friendly atmosphere in the Special Administrative Region (SAR) of China. Interestingly, Visa, a multinational payment card services corporation, has completed the Hong Kong Monetary Authority’s central bank digital currency (CBDC) pilot program in partnership with local banking firms.
According to a November 1 announcement, the program focused on the digital Hong Kong dollar and involved the tokenization of deposits. Visa confirmed that the money deposited with a bank is minted on its very own blockchain ledger with the backing of its balance sheet, adding:
“The time to final settlement for an interbank transfer, as confirmed through our pilot’s testing between the banks, was near real-time. Tokenized deposits were burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer.”
Additionally, Visa confirmed that its platform was capable of functioning 24/7 when compared to the traditional payment systems, which were inoperable after several hours or on weekends. The American corporate giant said that the pilot was completed “using blockchain networks that were available globally and supported by teams in other time zones.”
On the other hand, the deposits were tokenized and encrypted, which allowed them to be viewed on public blockchain explorers, but the identities of the entities involved in the transactions, balances, or transaction amounts to non-bank users remained obfuscated. Visa also said in the announcement that it will be testing tokenized asset markets and programmable finance in the next few steps.
Visa gave an example of a use case in the e-HKD pilot called ‘Property Payments,’ which involved “the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimizing lag time in the closure of the process.”
As reported earlier by Bitnation, Visa remains active in the blockchain space, testing and debuting new services for its users. Recently, the company extended its stablecoin payment service to include USDC stablecoins issued on the Solana blockchain.
On the other hand, Visa’s rival company, Mastercard, is also seeking to expand its presence in the digital asset sector. As per an earlier report, Mastercard is looking to extend its crypto payment card program by pursuing new collaborations with crypto firms.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
