HKMA partners with Banco Central do Brasil and Bank of Thailand on tokenization initiatives (HKMA)
The Hong Kong Monetary Authority (HKMA) has established new cross-border partnerships with Banco Central do Brasil (BCB) and the Bank of Thailand (BOT) to explore cross-border payment-versus-payment (PvP) and delivery-versus-payment (DvP) settlement use cases in areas such as trade finance payments and carbon credits. In the HKMA-BCB case the HKMA will link its Project Ensemble central bank digital currency (CBDC) sandbox to the BCB Drex CBDC pilot platform. In the HKMA-BOT case, the HKMA will link the Ensemble sandbox to the BOT’s Project San experimental tokenization platform, and test linking the two platforms with distributed ledger technology (DLT) based financial market infrastructures (FMIs). The BOT’s Project San, an internal initiative started in June 2024, aims to build and test a prototype for the tokenisation ecosystem. This includes a wholesale settlement engine, EVM-compatible ledgers supporting tokenised private money and assets, and interoperability mechanisms. [Read more at the HKMA here (on the HKMA-BCB part) and here (HKMA-BOT)]
HKMA provides updates on its fintech-related initiatives (HKMA)
Along with the aforementioned Project Ensemble collaborations, the HKMA provided updates on its other initiatives to spearhead fintech development in Hong Kong. The HKMA will collaborate with other members of the Linux Foundation Decentralized Trust on interoperability aspects of DLT-based FMIs in the Ensemble Sandbox. Also, the HKMA has completed the initial phase of six tokenization use cases across four main themes under Project Ensemble and will publish a report detailing the results of the experimentation in 2025. The HKMA is working closely with the People’s Bank of China to establish a cross-boundary linkage between Hong Kong’s Faster Payment System (FPS) and the Mainland’s Internet Banking Payment System (IBPS). This linkage will support 24/7, instant, small-value, cross-boundary remittances using account proxies like mobile numbers. A pilot launch is expected to be around mid-2025 tentatively. [Read more about these and other initiatives at the HKMA]
Project Mandala proves viability of upfront compliance for digital asset transactions (Ledger Insights)
The Bank for International Settlements Innovation Hub (BISIH) has completed the Project Mandala proof of concept (PoC), which aims to bring efficiencies to anti money laundering (AML), sanctions and capital flow management (CFM) compliance. It uses a compliance by design approach to streamline cross-border compliance processes for financial institutions and explores real-time policy and regulatory compliance monitoring for central banks and other regulators. The project preserves the existing regulatory framework whereby it encodes existing jurisdiction-specific regulatory requirements measures into the system, and maintains the current model, in which financial institutions are responsible for interpreting and applying official regulatory measures. [Read more at the BISIH]
Upcoming Speaking Engagements:
- Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
