HKMA central bank to investigate asset tokenization
To assist the tokenization industry in Hong Kong, local private sector companies like HashKey and HSBC teamed up with regulators like SFC and HKMA.
The sector is working with the Hong Kong Monetary Authority (HKMA), the country’s central bank and financial regulator, to investigate asset tokenization.
To create tokenization standards, the HKMA formally stated on May 7 that it will establish a special community with members from the industry and authorities.
The “Project Ensemble Architecture Community” was established with the goal of monitoring and assisting with the development of tokenization initiatives in Hong Kong.
Interoperability across wholesale central bank digital currencies (wCBDCs), a form of digital currency utilized by banks and other financial organizations, is another goal of the project.
The statement states that the community’s initial focus will be on developing a system that facilitates the easy interbank settlement of tokenized deposits for tokenized asset transactions through wCBDC.
Regulators such as the HKMA, the Securities and Futures Commission of Hong Kong, the BIS Innovation Hub Hong Kong Center, and the CBDC Expert Group will be part of the Project Ensemble Architecture Community at its inception.
Seven companies—Bank of China (Hong Kong), Hang Seng Bank, HSBC, Standard Chartered Hong Kong, HashKey Group, Ant Digital Technologies, and Microsoft Hong Kong—represent the private sector.
In order to support additional study and testing of tokenization use cases, the companies and authorities are expected to collaborate in designing and launching Project Ensemble Sandbox, which is scheduled to launch in the middle of 2024.
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“The establishment of the Community is predicated on a multitude of meticulous deliberations, encompassing the members’ proficiency in bolstering the tokenization industry in Hong Kong, experience and aptitude in pertinent domains, and inventive aptitude,” the HKMA declared in the statement.
“The HKMA will be closely collaborating with the industry, and as and when deemed appropriate, it will review the size and composition of the Community.”
A few months have passed since the HKMA initially revealed Project Ensemble, which is intended to aid in the growth of the Hong Kong tokenization industry.
Emitting a digital version of real-world assets, like stocks, real estate, commodities, and fiat currencies, is known as tokenization. As investors seek out new avenues for portfolio diversification, real-world tokenization (RWA) based on blockchain has become one of the major themes for 2024.
RWA tokenization is expected to become a $16 trillion business by 2030 and transform a number of industries, according to certain projections.
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