The "Tokenized Property Secured Loan" application for the Digital Hong Kong Dollar will submit a pilot plan proposal to the Hong Kong Monetary Authority by the end of this month

ChainCatcher news, according to the Hong Kong Economic Journal, the Hong Kong Monetary Authority launched a pilot program for the digital Hong Kong dollar (eHKD) in May this year to test potential use cases for eHKD. A cross-industry alliance led by Hong Kong Telecom (06823), ZhongAn Bank, and Boston Consulting Group (BCG) has completed a pilot test for "tokenized property-backed loans" and will submit a pilot program proposal to the Monetary Authority by the end of this month, with a white paper to be released after Hong Kong FinTech Week.

The alliance stated that the overall testing process went smoothly and believes the program will help reduce transaction costs and expedite the lending process. The cross-industry alliance also includes VSFG and paywith.glass.

According to the process design, users need to first open an account in the "simulated digital Hong Kong dollar" e-wallet provided by HKT Payment, a subsidiary of Hong Kong Telecom, and then navigate to the VSFG interface within the application to apply for tokenization of their assets (in this case, property). After obtaining the property tokens, users can use part of the tokens to apply for a secured loan from ZhongAn Bank, with funds disbursed through HKT's e-wallet for payment transactions. However, the loans issued can currently only be used for specified purposes as pre-defined, such as education and healthcare, to more effectively manage credit risk.