Ripple has announced its involvement in the Hong Kong Monetary Authority’s digital Hong Kong dollar (e-HKD) central bank digital currency (CBDC) pilot program. As part of the initiative, Ripple will demonstrate a solution for tokenizing real estate assets and also unveil its new CBDC platform.

Ripple has formed a partnership with Fubon Bank in Taiwan and other entities to showcase the use of tokenized assets in equity release. This demonstration will utilize a retail version of the e-HKD CBDC, allowing homeowners to access the equity in their homes through a reverse mortgage arrangement. With this approach, repayment obligations are deferred until the house is sold or the borrower passes away.

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According to Ripple, tokenization has the potential to streamline the equity release process and enhance efficiency for banks. By participating in the program’s second rail, Ripple will focus on exploring various use cases and addressing the practical aspects of implementing and designing the e-HKD CBDC. The Hong Kong Monetary Authority (HKMA) has confirmed that this phase of the program will involve in-depth analysis and discussions on application and implementation details related to the digital Hong Kong dollar.

“Experiences coming out of the Rail 2 pilots will factor into any decisions by HKMA to go live with an e-HKD at a later date (Rail 3),” Ripple vice president of central bank engagements and CBDCs James Wallis told Cointelegraph in a written Q&A.

More Explanation About Ripple’s CBDC Product 

The pilot initiative will utilize Ripple’s newly developed CBDC product, the Ripple CBDC Platform, which incorporates a private ledger leveraging XRP Ledger technology. The platform will offer advanced features such as offline transactions and support for non-smartphone devices. 

Wallis, a representative from Ripple, further stated the following: “All the pilot program partnerships that Ripple previously announced, including Montenegro, Palau and Bhutan, will leverage the CBDC Platform.”

After commencing its CBDC research in 2017, Hong Kong’s HKMA stated in a recent paper that: “While it appears that e-HKD might not have an imminent role to play in the current retail payment market, we believe prospective use cases for e-HKD can emerge quickly.”