The Hong Kong Monetary Authority (HKMA) has been networking its tokenization-focused Project Ensemble and has new collaborations to show for it.

Project Ensemble is being linked with the Central Bank of Brazil’s (CBB) Drex pilot project and the Bank of Thailand’s (BOT) Project San. 

Uniting tokenization projects around the world

The CBB announced the second phase of its Drex central bank digital currency (CBDC) pilot program in September and  began accepting applications  for it in mid-October. Tokenization is on the agenda for further Drex testing. 

Cross-border payment-versus-payment (PvP) and delivery-versus-payment (DvP) trade finance and carbon credit settlement use cases will be tested between Hong Kong and Brazil. The HKMA  noted  that the Drex project has more than 70 participants at this time. 

The HKMA will also  test  PvP and DvP settlements with the BOT. PvP is a method of monetary transaction settlement, and DvP is a settlement method for securities.

Trade payments and carbon credits will also be the focus of the collaboration with the BOT, with the goal of developing a proof-of-concept. 

According to the HKMA, the BOT launched Project San in June. BOT deputy governor of corporate development Alisara Mahasandana said:

“This partnership will significantly advance tokenisation efforts […] by offering broader insights into tokenisation, as different technical designs, business requirements, and regulatory frameworks of each jurisdiction will be taken into account."

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Hong Kong is trailblazing tokenization 

The HKMA  launched Project Ensemble  in March to develop wholesale CBDC to support tokenization. It convened an architecture committee  to consider the infrastructure  for the project that included Bank of China (Hong Kong), Hang Seng Bank, Hong Kong and Shanghai Banking Corporation (HSBC), Standard Chartered Hong Kong, HashKey Group, Ant Digital Technologies and Microsoft Hong Kong. 

Source: HKMA

The HKMA  onboarded the French  central bank to the project in June and  launched a sandbox  in August.

In February, prior to launching Project Ensemble, the HKMA issued guidance for financial institutions  to close gaps in tokenization  regulation. The Hong Kong  Securities and Futures Commission  issued rules for tokenized  securities offerings in November.

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