The Hong Kong Monetary Authority (HKMA) has launched an innovative collaboration with the European Central Bank (ECB) to explore the digital euro project, marking the first time the bank conducts tests outside of the EU.
Partnering with the Banque de France (BDF), the HKMA aims to test the operational compatibility between their respective CBDC infrastructures – BDF’s DL3S2 and HKMA’s Ensemble Sandbox.
The focus is on enhancing the efficiency of real-time cross-border and cross-currency payments, as well as promoting operational compatibility between financial market infrastructures in different jurisdictions.
Denis Beau, Deputy Governor of BDF, emphasized the goal of the initiative to improve cross-border payments using tokenized forms of the Hong Kong dollar and the euro through the “payment versus payment (PvP)” mechanism – a mechanism that ensures final settlement in one currency only when payment is made in another currency.
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The HKMA’s project initiated in March highlights their commitment to explore use cases of tokenization such as green bonds, carbon credits, and other real assets.
Howard Lee, Deputy Chief Executive of the HKMA, expressed optimism about the collaboration with BDF to make progress in global tokenization and promote the connection of financial markets through innovative cross-border payment solutions.
