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Hong Kong regulator launches tokenisation pilot

The Hong Kong Monetary Authority (HKMA) has started the second phase of its digital Hong Kong dollar pilot study.

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Hong Kong regulator launches tokenisation pilot

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Project e-HKD involves 21 financial institutions working on 11 use cases covering three themes - settlement of tokenised assets; programmability and offline payments.  

The HKMA will also establish the e-HKD Industry Forum to provide a "collaborative platform" for institutions to discuss common issues. A number of industry-led working groups will also be established to make recommendations on specific topics.

Among the use cases are one involving the settling of a tokenised fund using digital money and involving Hang Seng Bank, Aptos Lab and Boston Consulting Group as well as another involving Visa, ANZ, Fiedlity and ChinaAMC that will explore real-time settlmenent for itnterbank transfers and cross-border payments. 

The second phase will last around a year, according to HKMA chief executive Eddie Yue. 

“The e-HKD Pilot Programme has provided a valuable opportunity for the HKMA to explore with the industry how new forms of digital money can add unique value to the general public," said Yue. "The HKMA will continue to adopt a use-case driven approach in its exploration of digital money. We look forward to working closely with industry participants in Phase 2 to co-create various innovative use cases.” 

In addition, HKMA has also begun accepting applications for its Gen AI sandbox, a project that was announced in August and involved state-owned tech firm Cyberport. 

It will allow authorised instiutions to test their AI-based prototypes within a controlled setting and receive guidance from the regulator as well as access to Cyberport's infrastructure.

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