HKMA to investigate ways to improve the efficiency of settlement for cross-border transactions.
The e-HKD, a CBDC in Hong Kong, has been in development since 2021.
A MoU on bilateral cooperation on wholesale CBDC and tokenization was signed by the Hong Kong Monetary Authority (HKMA) and the Banque de France (BDF). Along with the many bigger initiatives in which the duo are involved, this effort is still ongoing.
According to a statement from the HKMA, they would investigate ways to improve the efficiency of settlement for cross-border transactions and ensure compatibility between their CBDC infrastructures. In preparation for the launch of a CBDC, the BDF has established infrastructure known as DL3S. The HKMA’s study will take place in the Project Ensemble sandbox.
Multiple Initiatives
Moreover, to investigate the feasibility of asset tokenization and develop a CBDC to back it, the HKMA initiated Project Ensemble in March. Afterwards, the agency formed an Architecture Community consisting of Hong Kong authorities, BIS, major local banks, Ant Digital Technologies, Microsoft Hong Kong, HashKey cryptocurrency exchange, and others. At the beginning of the year, the project was supposed to start doing study and testing.
Other initiatives also include the HKMA and the BDF as members. Coinciding with the announcement of the MoU, the HKMA became one of the second wave of partners to participate in the distributed ledger technology testing conducted by the European Central Bank. Tokenized government bond settlements are part of the experiments involving interoperability across blockchain modules.
mBridge initiative is the biggest CBDC-related initiative to date, and the BDF is an observer in it. HKMA was also an early participant.
The e-HKD, a CBDC in Hong Kong, has been in development since 2021. And is now in the second stage of its trial program. There has been a tremendous amount of activity in the area of CBDC application research.
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