Hong Kong Monetary Authority partners with Bank of Thailand on Cross-Border Tokenisation Initiatives

The Hong Kong Monetary Authority (HKMA) announced today (28 October) its collaboration with the Bank of Thailand (BOT) to explore cross-border tokenisation use cases under Project Ensemble and Project San¹.

The HKMA and the BOT began their fintech collaboration in 2019, with the signing of a Memorandum of Understanding (MoU)² aimed at fostering financial innovation in both jurisdictions.  Since then, the HKMA and the BOT have successfully collaborated on a number of ground-breaking projects, including Project Inthanon-LionRock and Project mBridge.

Building upon this rich heritage of cross-border fintech collaboration, the two central banks will explore Payment versus Payment (PvP) and Delivery versus Payment (DvP) tokenisation use cases, including trade payments and carbon credits.  A key aspect of this collaboration will be a proof of concept development, exploring the interoperability of new distributed ledger technology integrated financial market infrastructures (DLT FMIs).  In the proof of concept development, the HKMA and the BOT will test a link between DLT FMIs under Project Ensemble and the BOT’s Project San.  

The Ensemble Sandbox, launched in August this year, serves as a testing ground for industry participants to conduct tokenisation experiments across four main areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance.

The BOT’s Project San, an internal initiative started in June 2024, aims to build and test a prototype for the tokenisation ecosystem.  This includes a wholesale settlement engine, EVM-compatible ledgers supporting tokenised private money and assets, and interoperability mechanisms.

Mr Howard Lee, Deputy Chief Executive of the HKMA, said, “The HKMA and the BOT share the same vision for the potential of cross-border applications using central bank digital currency.  Expanding our partnership to explore cross-border tokenisation use cases further underscores this shared vision.  Same as our previous projects, I am confident that this collaboration will yield valuable insights for both jurisdictions.”

Mrs Alisara Mahasandana, Deputy Governor of Corporate Development at the Bank of Thailand, said, “Through our collaborative efforts in exploring the interoperability of tokenisation, mutual benefits for both Hong Kong and Thailand could be reaped.  This partnership will significantly advance tokenisation efforts in our financial sectors, both domestically and cross-border, by offering broader insights into tokenisation, as different technical designs, business requirements, and regulatory frameworks of each jurisdiction will be taken into account."

Hong Kong Monetary Authority
28 October 2024

Mr Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority (right), meets Mrs Alisara Mahasandana, Deputy Governor of Corporate Development at the Bank of Thailand (left), on the partnership between Hong Kong and Thailand on cross-border tokenisation initiatives.