The Hong Kong Monetary Authority (HKMA) will launch ‘Project Ensemble’ to develop a new wholesale central bank digital currency (wCBDC) to facilitate tokenization.
The focal point of the endeavor will be an innovative framework for counterparty settlement utilizing wCBDC. Its initial emphasis will be on tokenized deposits or commercial bank money for use in transactions involving tokenized assets. Establishing a laboratory to conduct research and experimentation will be the initial phase of the undertaking.
“Tokenisation use cases that include, among others, settlement of tokenised real world assets (e.g. green bonds, carbon credits, aircraft, electric vehicle charging stations, electronic bills of lading and treasury management).”
Local and multinational banks, “key players,” and the HKMA’s CBDC Expert Group, comprised of eleven academics from universities and disciplines in Hong Kong and established in October, will also form the wCBDC Architecture Community. Furthermore, the HKMA intends to solicit involvement from international organizations and central banks.
The HKMA chief executive stated, “We welcome global talents and industry players to come to Hong Kong and be a part of this fascinating tokenization journey.”
While the announcement did not explicitly state the Bank for International Settlements’ participation, it did refer to the HKMA’s ongoing trials with domestic and Chinese banks and its involvement in BIS initiatives, including initiatives mBridge, Dynamo, and Genesis.
These consist of trials performed in collaboration with HSBC and Hang Seng utilizing the bank’s “in-house” CBDC for e-HKD. HSBC and Ant Group collaborated on an additional initiative investigating the feasibility of transferring funds within the HSBC network via tokenized deposits.
Regarding the sale and distribution of tokenized products not subject to regulation by the Hong Kong Securities and Futures Commission, the HKMA issued guidance in February. Presently under deliberation is a regulatory framework for stablecoins by the latter organization.
