HONG KONG, June 6 (Reuters) – Hong Kong ‘s central bank plans to test the use of its digital currency under a pilot project in its HK$1.8 trillion ($229 billion) mortgage market, with an aim to slash a month-long loan approval process by half, according to the pilot participants.
The test comes amid fierce competition among banks to attract mortgage customers in the world’s least affordable housing market, with some lenders even handing out hefty cash rebates to draw in clients.
Here’s a look at how the digital currency, e-HK dollar (e-HKD), can be potentially used in the mortgage business:
WHAT IS THE E-HKD PILOT PROGRAMME?
The Hong Kong Monetary Authority (HKMA) kicked off the e-HKD pilot programme in May under which 16 firms were selected to examine the digital currency’s use across 14 projects.
Two of the pilot participants, Fubon Bank (Hong Kong) and blockchain solutions provider Ripple, will examine the e-HKD’s use in residential mortgage loans, which accounted for a-fifth of the banking sector’s loan book in April.