China's special administrative area of Hong Kong will test a digital version its dollar in the early part of this year. This is to prepare for its eventual roll-out. It is trying to catch up to those who have already launched digital currency central banks, such as the People's Republic's digital yuan initiative.
For Q4, trials of digital Hong Kong dollar are planned
In the remaining months of this year, Hong Kong will begin to test a currency called e-HKD. This digital version of the Hong Kong dollars, is being tested in Hong Kong. According to the Hong Kong Monetary Authority, (HKMA), the trials will be made easier by the adoption and construction of the necessary infrastructure.
After consultations to collect feedback on possible demand, privacy aspects and other issues around the issuance central bank digital currencies (CBDC), the pilot phase is now in place. Howard Lee, deputy chief executives of the HKMA (which plays the role of a bank), elaborated:
eHKD might not be in immediate use, but the HKMA will continue to pave the way for eHKD implementation, taking into consideration the results of our study, market consultation, and international development feedback.
A high-ranking official noted that CBDCs are being explored by many jurisdictions. The consultations were held by the banking authority. Participants expressed concern that Hong Kong is behind the international trend and need to catch up.
Selected banks, payment service providers, and tech companies will participate in the trials. Lee explained that these entities will test the use of the digital currency by their employees and clients. Lee explained that the e-HKD was introduced to give customers more options. He stressed that the move would not impact Hong Kong's three note-issuing bank branches.
HKMA will Set a Timeline for eHKD Launch after Tests
Colin Pou, executive director of financial infrastructure at HKMA, stated that the Hong Kong Monetary Authority (HKMA) will determine the timeline for launching e-HKD after the pilot phase. In June 2021, the regulator announced the CBDC plan as part of Fintech 2025. The white paper was published in October, and consultations closed in May.
Hundreds of central banks have studied digital currencies around the globe and taken steps to create theirs. People's Bank of China has been running pilot programs in a variety of cities for its digital yuan, (e-CNY), and recently announced that the expansion of the pilot areas in four of these areas will be made to the provincial level.
Howard Lee, an earlier this month, revealed that Hong Kong also has conducted small-scale tests using the e-CNY in this year's Hong Kong. The region's financial authorities announced last summer that they would link the digital Yuan to their domestic payments system. The HKMA has been working closely with the PBOC and other central banks in Thailand and the United Arab Emirates to facilitate cross-border CBDC payments.
Are you optimistic that Hong Kong will catch up to mainland China with its digital currency project. Please leave your comments below.
Frequently Asked Questions
Can I hold a gold ETF in a Roth IRA?
A 401(k) plan may not offer this option, but you should consider other options, such as an Individual Retirement Account (IRA).
A traditional IRA allows contributions from both employee and employer. Another option is to invest in publicly traded corporations with an Employee Stockownership Plan (ESOP).
An ESOP is a tax-saving tool because employees have a share of company stock as well as the profits that the business generates. The money you invest in the ESOP will be taxed at a lower rate than if it were directly held by the employee.
Also available is an Individual Retirement Annuity. An IRA allows for you to make regular income payments during your life. Contributions to IRAs can be made without tax.
How do I Withdraw from an IRA with Precious Metals?
First, determine if you would like to withdraw money directly from an IRA. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
You should open a taxable brokerage account if you’re willing to pay a penalty if you withdraw early. This option will require you to pay taxes on the amount that you withdraw.
Next, you need to determine how much money is going to be taken out from your IRA. This calculation will depend on many factors including your age at the time of withdrawal, how long the account has been in your possession, and whether you plan to continue contributing towards your retirement plan.
Once you know what percentage of your total savings you’d like to convert into cash, you’ll need to determine which type of IRA you want to use. Traditional IRAs let you withdraw money tax-free after you turn 59 1/2, while Roth IRAs require you to pay income taxes upfront but allow you access the earnings later without paying any additional taxes.
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You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. Some storage facilities will take bullion bars while others require you only to purchase individual coins. Before you choose one, weigh the pros and cons.
Bullion bars require less space, as they don’t contain individual coins. But, each coin must be counted separately. However, individual coins can be stored to make it easy to track their value.
Some people prefer to keep coins safe in a vault. Others prefer to store them in a safe deposit box. Whichever method you choose, make sure you store your bullion safely so you can enjoy its benefits for years to come.
What is a gold IRA account?
Gold Ira accounts are tax-free investment vehicles for people who want to invest in precious metals.
You can buy physical gold bullion coins at any time. To invest in gold, you don’t need to wait for retirement.
The beauty of owning gold as an IRA is you can hold on to it forever. Your gold holdings will not be subject to tax when you are gone.
Your heirs will inherit your gold, and not pay capital gains taxes. And because your gold remains outside of the estate, you aren’t required to include it in your final estate report.
First, an individual retirement account will be set up to allow you to open a golden IRA. After you do this, you will be granted an IRA custodian. This company acts like a middleman between the IRS and you.
Your gold IRA custody will take care of the paperwork and send the forms to IRS. This includes filing annual reports.
Once you’ve established your gold IRA, you’ll be able to purchase gold bullion coins. The minimum deposit is $1,000. The minimum deposit is $1,000. However, you will receive a higher percentage of interest if your deposit is greater.
Taxes will apply to gold that you take out of an IRA. You’ll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
You may not be required to pay taxes if you take out only a small amount. However, there are exceptions. There are some exceptions. For instance, if you take out 30% or more from your total IRA assets, federal income taxes will apply plus a 20 percent penalty.
It is best to not take out more than 50% annually of your total IRA assets. You’ll be facing severe financial consequences if you do.
Is buying gold a good option for retirement planning?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
The best form of investing is physical bullion, which is the most widely used. There are other ways to invest gold. Research all options carefully and make an informed decision about what you desire from your investments.
For example, purchasing shares of companies that extract gold or mining equipment might be a better option if you aren’t looking for a safe place to store your wealth. Owning gold stocks should work well if you need cash flow from your investment.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item’s value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you take distributions before hitting 59.5, you’ll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
finance.yahoo.com
forbes.com
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China’s Evergrande Crisis – Forbes Advisor
cftc.gov
investopedia.com
How To
Tips for Investing with Gold
One of the most sought-after investment strategies is investing in gold. There are many benefits to investing in gold. There are many ways you can invest in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
You should consider some things before you decide to purchase any type of gold.
- First, verify that your country permits gold ownership. If it is, you can move on. Or, you might consider buying gold overseas.
- Secondly, you should know what kind of gold coin you want. You can choose between yellow gold and white gold as well as rose gold.
- You should also consider the price of gold. Start small and move up. Diversifying your portfolio is a key thing to remember when purchasing gold. Diversifying your portfolio includes stocks, bonds, mutual funds, real estate, commodities, and mutual funds.
- Lastly, you should never forget that gold prices change frequently. Be aware of the current trends.
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By: Lubomir Tassev
Title: Hong Kong to Start Testing Digital Currency in Coming Months
Sourced From: news.bitcoin.com/hong-kong-to-start-testing-digital-currency-in-coming-months/
Published Date: Thu, 22 Sep 2022 08:30:12 +0000
