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Banque de France and HKMA kick off cross-border CBDC project

Banque de France and HKMA kick off cross-border CBDC project

The Hong Kong Monetary Authority is to become the first central banking institution outside of the EU to participate in the European Central Bank's digital euro exploratory project.

Under the initiative, the Hong Kong central bank is collaborating with the Banque de France to test interoperability between their wholesale CBDC infrastructure - the BDF’s DL3S2 and the HKMA’s Ensemble Sandbox - with the main focus on real-time cross-border and cross-currency payments.

The cross-border experiment aims to explore how to optimise settlement efficiency of cross-border transactions, and facilitate interoperability between financial market infrastructures in different jurisdictions.

Denis Beau first deputy governor of the BDF, says: ”As we have set the clear objective to improve cross-border payments, we have the opportunity brought by the Eurosystem exploratory work to collaborate with the HKMA on different use cases for payment versus payment between the tokenised form of the Hong Kong dollar and the Euro."

The HKMA in March kicked off Project Ensemble to focus on tokenised deposits issued by commercial banks and made available to the general public. At the core of the project is a wCBDC Sandbox that the HKMA will launch this year to further research and test tokenisation use cases that include, among others, settlement of tokenised real world assets such as green bonds, carbon credits, aircraft, electric vehicle charging stations, electronic bills of lading and treasury management.

Howard Lee, deputy chief executive of the HKMA, states: "With the collaboration between BDF’s DL3S and the HKMA’s Ensemble Sandbox underway, we look forward to joining hands with the BDF to further explore different cross-border payment solutions and use cases, to promote financial market connectivity and push forward the development of the global tokenisation market.”

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