Israel working with Hong Kong to test digital currency risk, Bloomberg says

The Bank of Israel is working with the Hong Kong Monetary Authority on testing a new digital currency against cyber security risks, the Bank of Israel told Bloomberg in a statement. 

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The joint project will start in the third quarter, using a two-tier central bank digital currency (CBDC), Bloomberg reported on Thursday.

The retail CBDC is being designed to allow intermediaries, such as banks, handle it with no financial exposure to their customers, and the testing process will assess whether this makes it less vulnerable to hackers.

Such an “exposure-free” CBDC may carry “less financial risk for the customer, more liquidity, lower costs, increased competition, and wider access,” Bloomberg cited the Bank of Israel as saying. 

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The Bank for International Settlements’ Innovation Unit will also take part in the trial. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Mike Millard has worked as an editor for Bloomberg and Reuters, various newspapers and websites. He lived in Asia for more than two decades and now calls the Greek island of Corfu home. He is the author of three books.

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