The Hong Kong Monetary Authority has partnered with the Bank of Thailand and Banco Central do Brasil to advance cross-border tokenization projects under collaborative initiatives.

Hong Kong’s Financial Watchdog Collaborates with Central Banks

Hong Kong’s financial watchdog, the Hong Kong Monetary Authority (HKMA), has partnered with the central banks of Thailand and Brazil to explore cross-border tokenization projects. This collaboration aims to develop use cases in areas such as trade finance and carbon credits.

In two separate press releases on October 28, the HKMA announced that these collaborations will focus on developing use cases for tokenized assets. These initiatives are part of ongoing projects aimed at enhancing financial technology integration across borders.

Proof-of-Concept Initiatives

Both institutions will build a proof-of-concept to explore the “interoperability of new distributed ledger technology integrated financial market infrastructures,” according to officials. This effort is a significant step towards financial innovation and integration.

“Expanding our partnership to explore cross-border tokenization use cases further underscores this shared vision.”

– Howard Lee, Deputy Chief Executive of the HKMA

Agreement with the Bank of Thailand

Under the agreement with the Bank of Thailand, the HKMA will link its Ensemble Sandbox with the BOT’s Project San to test Payment versus Payment (PvP) and Delivery versus Payment (DvP) settlements. These initiatives will cover trade payments, carbon credits, and other tokenization use cases.

Collaboration with Banco Central do Brasil

Meanwhile, the HKMA’s collaboration with the Banco Central do Brasil will connect the Ensemble Sandbox with Brazil’s Drex pilot platform to conduct similar experiments. The Drex pilot, launched earlier in September, is part of Brazil’s effort to develop a tokenized financial market and involves over 70 companies exploring themes such as trade finance and green finance.

According to the press release, the HKMA and BCB plan to conduct cross-border experiments linking their central bank digital currency infrastructures to enhance PvP and DvP settlements.

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