According to BlockBeats, on January 10, according to an official announcement, the Hong Kong Monetary Authority (HKMA) announced the launch of a distributed ledger technology regulatory incubator to assist banks in responsibly exploring the potential of distributed ledger technology (DLT).
The incubator is a new regulatory arrangement designed to assist banks in fully leveraging the potential of DLT and effectively managing related risks. The incubator will enhance the risk management capabilities of individual banks and the banking industry as a whole, especially the risks that may arise when banks launch services that involve both DLT banking infrastructure and traditional banking infrastructure (such as deposits and loans). Tokenized deposits, which are of concern to the industry, will be the focus of the incubator after its launch.
For individual banks, the incubator will provide a one-stop regulatory platform, allowing banks to confirm that they have fully implemented the relevant risk management measures before the full rollout of DLT projects. Through the platform, banks can communicate with the dedicated team from the Monetary Authority and receive regulatory advice, as well as choose to conduct real-world testing as needed to verify and refine risk management measures in a pragmatic and continuously evolving manner.
The incubator will also launch a series of measures to enhance the banking industry's awareness and understanding of best practices in DLT risk management, including regulatory guidelines, industry sharing sessions, and forward-looking research projects. These initiatives will ultimately help improve the banking sector's capacity to adopt DLT solutions.