The Hong Kong Monetary Authority (HKMA) will be the first central bank outside the European Union to engage in the European Central Bank’s digital euro exploratory project.
This initiative involves collaboration between the HKMA and the Banque de France to test the interoperability of their wholesale central bank digital currency (CBDC) infrastructures—specifically, the Banque de France’s DL3S2 and the HKMA’s Ensemble Sandbox. The primary focus will be on real-time cross-border and cross-currency payments.
The aim of the cross-border experiment is to enhance the efficiency of settlement processes in cross-border transactions and to facilitate interoperability between different financial market infrastructures.
Denis Beau, the first deputy governor of the Banque de France, noted that “with our objective to improve cross-border payments, we have a unique opportunity through the Eurosystem’s exploratory work to collaborate with the HKMA on various use cases for payment versus payment involving the tokenised versions of the Hong Kong dollar and the Euro.”
In March, the HKMA launched Project Ensemble, which focuses on tokenised deposits issued by commercial banks for public use. Central to this project is a wholesale central bank digital currency Sandbox, set to debut this year, which will allow for further research and testing of tokenisation applications. These applications include the settlement of tokenised real-world assets, such as green bonds, carbon credits, aircraft, electric vehicle charging stations, electronic bills of lading, and treasury management.
Howard Lee, the deputy chief executive of the HKMA, expressed enthusiasm for the collaboration, stating, “With the partnership between the Banque de France’s DL3S and the HKMA’s Ensemble Sandbox, we are eager to explore diverse cross-border payment solutions and use cases that will enhance financial market connectivity and advance the global tokenisation market.”