HKMA and BDF Partner for Joint Development on Digital Currency and Tokenization
Summary:
The Hong Kong Monetary Authority (HKMA) and Banque de France (BDF) have entered an agreement focused on the joint development of wholesale central bank digital currencies and tokenization. Additionally, they will study the interoperability between their own digital currencies and their efficacy in cross-border transactions. The BDF plans to use its existing DL3S platform while the HKMA will utilize the Project Ensemble sandbox for their research.
The Hong Kong Monetary Authority (HKMA) and Banque de France (BDF) have cooperatively agreed on a Memorandum of Understanding (MoU) focused on the shared development and tokenization of wholesale central bank digital currencies (CBDC). Aside from this, both institutions are also involved in multiple significant projects. They will be investigating the potential for interconnectivity between their own CBDC structures to enhance cross-border transaction efficiency, as announced by the HKMA. With the BDF ready to utilise DL3S, their existing infrastructure, the HKMA has opted to use the Project Ensemble sandbox for research purposes.
Project Ensemble was initiated by the HKMA in March in order to delve into the perspective of asset tokenization whilst developing a supporting CBDC. The agency subsequently created the Architecture Community in Hong Kong involving local banks, Hashkey crypto exchange, Ant Digital Technologies, Microsoft Hong Kong, and the Bank for International Settlements (BIS). The beginning of the project's testing and research process was planned for the middle of the year.
Denis Beau, BDF's First Deputy Governor, welcomed the announcement: “The timely commencement of Project Ensemble was exceptionally beneficial for the inception of our collaboration. We eagerly anticipate further testing possibilities in the context of our DL3S platform.”
Both the HKMA and BDF are working together on additional ventures. Just recently, the HKMA joined the second wave of participants testing the distributed ledger technology of the European Central Bank, an action announced concurrently with the MoU. This testing will amplify the interoperability among blockchain modules specifically for settling the tokenization of government bonds.
The BDF, although not a direct participant, maintains a watching brief over Project mBridge, currently the most extensive CBDC project. The HKMA, conversely, is one of the original contributors. The HKMA's digital currency, the e-HKD, has been in progress since 2021 and is now n the second stage of its initial pilot phase. They have been dynamic in exploring the various uses of a CBDC. In Project Aurum, a retail e-HKD of significant complexity was assessed in collaboration with the BIS. Furthermore, the HKMA has partnered with BIS and the United Nations to create tokenized "green" bonds and has garnered the support of Ripple and Visa to explore the tokenization of real estate.
Published At
6/29/2024 12:17:50 AM
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