Hong Kong’s Central Bank Launches Blockchain Initiative to Help Banks

Hong Kong’s central bank has launched a new initiative to support banks in adopting distributed ledger technology (DLT).

The program, introduced on January 8, 2025, aims to help financial institutions smoothly incorporate this advanced technology while ensuring that it is used safely and efficiently.

The HKMA’s “Supervisory Incubator for DLT” will assist individual banks by providing hands-on support from the central bank’s team during live trials, specifically testing risk management systems. The first phase of the program will focus on tokenized deposits, with further development planned for broader DLT applications in the banking sector.

In addition to individual bank support, the program will promote industry-wide growth by sharing knowledge, offering guidance, and conducting research to help other financial institutions navigate DLT implementation.

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At the FiNETech4 event, where the announcement was made, HKMA Executive Director Carmen Chu highlighted how DLT could revolutionize banking by enabling real-time ledger updates and smarter transaction management. These innovations could lead to new financial products and revenue opportunities, driven by tokenized data and smart contracts.

In line with these advancements, Hong Kong has also been moving to integrate digital assets into its financial system. Recent proposals, including a suggestion to add Bitcoin to Hong Kong’s national reserve, and new licenses for several virtual asset trading platforms, reflect the growing interest in expanding the use of cryptocurrencies and blockchain technology in the region.

Alexander Stefanov