Hong Kong forms industry community to develop wholesale CBDC, tokenization

Hong Kong has formed a working group to “develop standards” for its tokenization market, especially for the use of wholesale central bank digital currency (CBDC) .

The Hong Kong Monetary Authority, the region’s de facto central bank, announced on Tuesday that it has established the “Project Ensemble Architecture Community,” aiming to support interoperability among wholesale CBDC, tokenized money and tokenized assets.

“It will make recommendations on specific topics, initially focusing on setting up a mechanism to support seamless interbank settlement of tokenized deposit through wCBDC for tokenized asset transactions,” the HKMA said in the statement.

The working group also plans to facilitate the design and implementation of Project Ensemble , a new wCBDC project the HKMA launched in March.

Participants of the “Architecture Community” include the HKMA, the Securities and Futures Commission, the BIS Innovation Hub Hong Kong Centre, the CBDC Expert Group and seven members from the private sector — namely Bank of China (Hong Kong), Hang Seng Bank, HSBC, Standard Chartered Hong Kong, HashKey Group, Ant Digital Technologies and Microsoft Hong Kong.

The HKMA is testing its CBDC and launched the second phase of the e-HKD pilot in March. The second-phase pilot is expected to last until mid-2025.

The Hong Kong authorities started to research CBDCs in 2017. They began placing greater emphasis on studying a potential e-HKD in 2021 at both wholesale and retail levels, according to the HKMA’s website.