CBDC: Hong Kong Joins ECB in First Non-EU Collaboration for Digital Euro Project

The Hong Kong Monetary Authority (HKMA) has embarked on a groundbreaking collaboration with the European Central Bank (ECB) to explore the digital euro project, marking its first participation outside the EU.

Partnering with the Banque de France (BDF), HKMA aims to test interoperability between their respective wholesale CBDC infrastructures – BDF’s DL3S2 and HKMA’s Ensemble Sandbox.

The focus is on enhancing real-time cross-border and cross-currency payments efficiency, and fostering interoperability between financial market infrastructures across jurisdictions.

Denis Beau, first deputy governor of BDF, emphasized the initiative’s goal to improve cross-border payments, leveraging tokenized forms of the Hong Kong dollar and Euro through payment versus payment mechanisms.

HKMA’s Project Ensemble, initiated in March, underscores their commitment to exploring tokenization use cases like green bonds, carbon credits, and other real-world assets.

Howard Lee, deputy chief executive of HKMA, expressed optimism about collaborating with BDF to advance global tokenization and promote financial market connectivity through innovative cross-border payment solutions.