HKMA reveals a wholesale central bank digital currency project

Thursday 7 March 2024 13:32 CET | News

The Hong Kong Monetary Authority (HKMA) has revealed a new wholesale central bank digital currency (wCBDC) project.


HKMA's Project Ensemble is aimed at supporting the development of the tokenisation market in Hong Kong. The project will focus on exploring innovative financial market infrastructure (FMI) to enable seamless interbank settlement of tokenised money using wCBDC. Initially, the project will concentrate on tokenised deposits, which represent digital versions of commercial bank deposits accessible to the public. Using wCBDC as the underlying framework, tokenised deposits can facilitate transactions involving tokenised assets, presenting opportunities for optimisation and innovation in the tokenisation realm. 

At the heart of Project Ensemble is a wCBDC Sandbox, which is scheduled for launch this year by HKMA. The sandbox will serve as a platform for researching and testing various tokenisation use cases, including the settlement of tokenised real-world assets such as green bonds, carbon credits, aircraft, electronic bills of lading, and treasury management. This initiative could potentially bridge the gap between tokenised real-world assets and money in transactions.


The Hong Kong Monetary Authority (HKMA) has revealed a new wholesale central bank digital currency (wCBDC) project.


Consultations with the community

To establish industry standards and a forward-looking strategy, HKMA will convene a wCBDC Architecture Community comprising local and multinational banks, digital asset industry stakeholders, technology firms, and the CBDC Expert Group. According to the HKMA, collaboration with Cyberport and Hong Kong Science and Technology Parks Corporation will continue to support asset tokenisation and local fintech innovation. 

Project Ensemble is a significant component of HKMA's efforts to facilitate the tokenisation market's development, complementing existing initiatives such as e-HKD and collaborations with the BIS Innovation Hub Hong Kong Centre on projects such as mBridge, Dynamo, and Genesis.  

If there is sufficient industry interest, HKMA will proceed with a 'live' issuance of the wCBDC at the appropriate time. Moreover, building on prior experiments with HSBC, Hang Seng Bank, and Ant Group in 2023, HKMA plans to engage international stakeholders, including other central banks and organizations, in future experiments within the wCBDC Sandbox. 

Representatives from the HKMA brought up Hong Kong's commitment to innovation and international collaboration, noting that Project Ensemble would support the financial industry and strengthen Hong Kong's position in tokenised money and assets. They also encouraged global talents and industry players to participate in Hong Kong's tokenisation journey.

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Keywords: tokenization, CBDC, digital assets, cryptocurrency
Categories: Banking & Fintech
Companies: Hong Kong Monetary Authority
Countries: Hong Kong
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