Hong Kong’s financial regulator, the Hong Kong Monetary Authority, has teamed up with the central banks of Thailand and Brazil to explore tokenization use cases in cross-border finance.
In a press release on October 28, the HKMA announced that the collaborations would concentrate on creating use cases for tokenized assets as part of ongoing efforts to enhance cross-border financial technology integration. According to officials, the institutions plan to develop a proof-of-concept to investigate the interoperability of financial market infrastructures integrated with new distributed ledger technology.
“Expanding our partnership to explore cross-border tokenization use cases further reinforces our shared vision,”
said Howard Lee, deputy chief executive of the HKMA.
Under this initiative, HKMA will collaborate with the Bank of Thailand to connect its Ensemble Sandbox with Thailand’s Project San. Together, they will test Payment versus Payment (PvP) and Delivery versus Payment (DvP) settlements, targeting areas such as trade payments, carbon credits, and other tokenized applications.
Simultaneously, HKMA’s collaboration with Banco Central do Brasil will integrate its Ensemble Sandbox with Brazil’s “Drex” pilot platform, which was launched in September. The Drex pilot is part of Brazil’s initiative to develop a tokenized financial market. It involves over 70 companies working on trade finance, green finance, and other areas. This partnership will similarly focus on improving PvP and DvP mechanisms for cross-border settlements.
HKMA’s Project Ensemble Sandbox, introduced on August 28, has been central to these developments. It is dedicated to testing real-world asset (RWA) tokenization and optimizing tokenized money for interbank settlements. The sandbox currently explores four key areas: fixed income and investment funds, liquidity management, green finance, and trade finance. Participating banks have integrated tokenized deposit platforms, enabling real-time testing of PvP and DvP mechanisms, though specific participants remain undisclosed.
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