JAKARTA Hong Kong's financial authorities are increasingly working on central bank digital money to stem the rapid pace of crypto in the region. This is evidenced by the steps taken by the Hong Kong Monetary Authority (HKMA) in collaboration with the Bank of Israel (BOI), and the Bank for International Settlements Innovation Hub (BISIH) Hong Kong Center for experiments with central bank digital currencies (CBDC).
This project is known as Project Sela and aims to develop an efficient, accessible, and secure CBDC (RCBDC) system while maintaining concerns regarding cyber privacy and security. The project creates a model in which the central bank oversees the liner and provides accounts for end users. While customer service and compliance are managed by sector intermediaries.
According to experts, this unique structure can encourage innovation, healthy competition, and service improvement. In an effort to implement the Project Sela framework, there is a new category of service providers known as "Access Enablers" (AE), which will manage customer interactions without controlling or holding the digital currency itself.
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This approach is claimed to reduce credit risk as all transactions are completed through the central bank, which remains responsible for digital currencies. The move also promotes the diversity of payment service providers and healthy competitions in the market.
Cybersecurity is the main focus in Project Sela as increased accessibility can pose a potential risk. By combining Israel's expertise in cybersecurity and based on experience from projects in Hong Kong, the goal is to keep security intact while leveraging greater accessibility benefits.
Project Sela relies on linear technology that has been developed with sectoral service providers such as FIS and M10 Networks. It is based on the experience gained from Project Aurum in Hong Kong and the development of the digital currency Shekel in Israel.
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