Odaily Planet Daily News According to the official announcement, the Hong Kong Monetary Authority (HKMA) has launched a distributed ledger technology regulatory incubator (the incubator) to assist banks in responsibly exploring the potential of distributed ledger technology (DLT). The incubator is a new regulatory arrangement aimed at helping banks fully harness the potential of DLT while effectively managing associated risks. The incubator will enhance the risk management capabilities of individual banks and the overall banking sector, particularly regarding risks that may arise when banks launch services involving both DLT banking infrastructure and traditional banking infrastructure (such as deposits and loans). Tokenized deposits, a focus of industry concern, will be a key project following the incubator's launch. For individual banks, the incubator will provide a one-stop regulatory platform, allowing banks to confirm that they have fully implemented relevant risk management measures before fully launching DLT projects. Through the platform, banks can communicate with the HKMA's dedicated team and receive regulatory advice, as well as choose to conduct real-world testing as needed to pragmatically and continuously validate and refine risk management measures. The incubator will also introduce a series of measures to promote the banking sector's understanding and awareness of best practices in DLT risk management, including regulatory guidelines, industry sharing sessions, and forward-looking research projects. These initiatives will help enhance the banking sector's capacity to adopt DLT solutions in the long term.