HKMA’s CBDC Project Ensemble Launches Sandbox, Focuses on Tokenized Assets Transactions

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Sujha Sundararajan

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Sujha Sundararajan

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August 29, 2024

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The Hong Kong Monetary Authority (HKMA) has launched a sandbox to its wholesale central bank digital currency (wCBDC) – Project Ensemble.

Announced Wednesday, the sandbox aims to foster the development of tokenization in Hong Kong. It enables firms to research and test tokenization use cases, both traditional securities and real-world assets (RWA).

Further, the regulator has introduced four key areas that the sandbox will focus on initially. These include fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance.

“After thorough consideration of industry interest, prevailing market trends and potential innovative impact, the initial round of experimentation will cover tokenisation of both traditional financial assets and real-world assets, focusing on four main themes,” the release read.

The HKMA has already completed the building and setting up of the sandbox for interbank settlement using experimental tokenised money.

Some of the major participating in the sandbox include Standard Chartered, the Bank of China, HSBC, Ant Digital, Microsoft. Notably, financial services corporation Ant Group noted in a separate statement that it would collaborate with the other partners to develop a global liquidity management solution that allows banks to connect to and exchange their tokens.

“The introduction of the Project Ensemble Sandbox to test tokenisation use cases marks a significant step forward for the HKMA and the industry to explore the application of tokenisation in real-life business scenarios,” said Eddie Yue, Chief Executive of the HKMA.

SFC Joins HKMA to Foster Sustainable Tokenized Market in Hong Kong

The Securities and Futures Commission (SFC) is aiding in developing an appropriate regulatory framework to support the sustainable development of the tokenised asset market in Hong Kong.

Additionally, the securities regulator will co-lead with HKMA on tokenisation initiatives for the asset management industry.

“The Sandbox launch today is a clear example of how innovation and regulation can go hand in hand to blaze a new path for our financial markets,” says Julia Leung, CEO of the SFC.

Also, the HKMA will explore collaborating with the BIS Innovation Hub Hong Kong Centre in framing more themes to further advance the Sandbox.