As part of Hong Kong’s central bank digital currency (CBDC) trials, Visa worked with HSBC and HSBC-owned Hang Seng bank on tokenized deposit trials. While B2B payments used tokenized commercial bank money, the hypothetical eHKD CBDC was used for the interbank settlement of the deposit tokens.
The two use cases in the experiment were for high value property payments and for the settlement of credit card transactions between the acquiring bank and the merchant.
Particularly in the real estate example, blockchain enables atomic settlement where the payment and the asset both happen simultaneously. This reduces settlement risk. Otherwise, someone can pay for the real estate, but the transfer of the property title might not occur simultaneously. Additionally, in Hong Kong there are transaction limits for using the faster payment system (FPS). The typical consumer limit is around HK$10,000 but regular business users can get far higher limits of HK$1 million to HK$1.5 million.
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