It has been published by the hong kong monetary authority a technical insight paper on central bank digital currencies (cbdcs). the article proposes two viable designs, but it also highlights seven issues that must be addressed before the “e-hkd” may be effectively deployed in the real world. the hkma does not support the establishment of a cbdc but rather seeks to encourage debate on how such a program could be implemented. scalability, performance, and resilience, as well as the requirement to handle large numbers of users, are all important considerations.

however, these are what the hkma discovered and highlighted seven issues that they believe must be addressed before a cbdc can be put in place.

the seven are as follows:

1. users’ anonymity must be protected while also allowing for the identification of manipulated data.
2. in interoperability, we mean the capacity to communicate between current financial market structures and new fintech constructions that utilize a variety of cryptocurrencies or blockchains;
3. performance and scalability – due to the possibility that security overheads may render cbdcs less effective, as well as the need to manage very high numbers of users;
4. definition of attack vectors and standards to repel assaults in the service of both resilience and transaction security in the field of cybersecurity.
5. compliance – to ensure that a cbdc does not make measures intended to combat money laundering more difficult to implement or evade laws prohibiting the funding of terrorism.
6. rapid surges in demand for digital currencies must be accommodated by the system, which, like anything digital, must have fail-safes in place; operational robustness and resilience must be built-in.
7. is it possible for cbdcs to enhance current business operations via the use of technology-enabled functional capabilities? what characteristics are required to provide the advantages that existing payment methods do not provide?

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