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The Hong Kong Monetary Authority (HKMA) is set to become the first central banking institution outside the European Union to join the European Central Bank’s digital euro exploratory project. In this initiative, the HKMA collaborates with the Banque de France (BDF) to test interoperability between their wholesale Central Bank Digital Currency (CBDC) infrastructures: BDF’s DL3S2 and HKMA’s Ensemble Sandbox. The primary focus is on enabling real-time cross-border and cross-currency payments.
This cross-border experiment aims to optimize the settlement efficiency of cross-border transactions and facilitate interoperability between financial market infrastructures across different jurisdictions.
Denis Beau, the first deputy governor of the BDF, states: “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 tokenized form of the Hong Kong dollar and the Euro.”
In March, the HKMA launched Project Ensemble, focusing on tokenized deposits issued by commercial banks and made available to the general public. Central to the project is a wholesale CBDC Sandbox, which the HKMA will launch this year. This sandbox will further research and test tokenization use cases, including the settlement of tokenized 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, comments: “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, promoting financial market connectivity and advancing the development of the global tokenization market.”
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