Opening Remarks at “Tokenisation: Banking the Future”

1. Good afternoon, everyone. A very warm welcome to all of you joining us today.
2. And thank you, Nelson (Chow, Executive Director (Financial Infrastructure), Hong Kong Monetary Authority), for your introductory remarks. The strategic direction of Fintech 2030 sets a powerful foundation for what lies ahead.
3. Turning to a supervisory perspective, let’s zoom into the transformational impacts of distributed ledger technology, or DLT on banks.

DLT’s Transformative Power

4. The rise of DLT is already creating new opportunities with its distinct features: transparent, secure, and programmable.
5. By enabling near real-time settlement, fractional ownership, and automated execution, DLT is breaking down the traditional barriers to market access and capital efficiency.
6. To fully appreciate the opportunity before us, let’s consider how DLT is unlocking three new forms of liquidity – best described as novel, smart, and trusted.

Novel Liquidity

7. First, Novel Liquidity, which focuses on the question of “what”.
8. Traditional liquid assets are those which can be traded easily and quickly, and they are usually in the forms of cash, equities and bonds.
9. Now DLT enables more novel forms of liquidity: the ability to tokenise assets once considered illiquid, from corporate loans to carbon credits and intellectual properties. DLT lowers entry barriers, simplifies ownership, and vastly expands the pool of liquidity. 

Smart Liquidity

10. Second, the question of “how”. This brings us to the term “Smart Liquidity”.
11. It is essentially how DLT smart contracts can help automate on-chain value transfer. This will lower transaction costs, compress settlement time, and streamline operations.
12. With DLT, we are able to move from “T+X” to near real-time settlement, thereby reducing counterparty credit risk.
13. This shift enables broader participation. In Hong Kong, we are already seeing this in action through tokenised deposits as well as tokenised bonds and funds.
14. But it does not stop here. Smart Liquidity is also the gateway to a new generation of financial products – blending programmable intelligence directly into the very nature of liquidity itself.  We do see potentials in automated repo transactions, or tokenised funds with auto-rebalancing logic.

Trusted Liquidity

15. Last but not the least, it is about Trusted Liquidity, where we delve into the fundamental question of “who”.
16. The full potential of Novel and Smart Liquidity can never be realised without someone who can be trusted by the market.
17. For example, who is ensuring the existence of the real-world assets underneath the tokens? Who is overseeing the integrity and security of the smart contracts involved?
18. Banks have established risk management systems and regulatory compliance frameworks. Therefore, banks are uniquely positioned to act as the trusted intermediary, bridging traditional finance and the digital asset ecosystem.

Call for Action

19. To support responsible innovation, the HKMA has launched Project Ensemble¹ and the Supervisory Incubator for DLT². These platforms support trials and refinement of tokenisation use cases in a risk-controlled environment.
20. Today, together with the participants of these initiatives, we are excited to share insights and practical experiences gained from real use cases validated on these platforms.
21. And more, we are issuing a circular, inviting banks to conduct strategic reviews of their business models amid digital transformation³. We expect banks to identify opportunities to adapt or transform their product offerings, revenue models, customer engagement strategies, risk management frameworks, and operational processes. 
22. This will steer how banks navigate in the next five years: understand how emerging technologies like DLT, artificial intelligence, cloud, and high-performance computing are impacting their business models, and make strategic responses to stay relevant, resilient and competitive.

Concluding remarks

23. Once again, I wish to extend my deepest gratitude to our distinguished speakers for their valuable insights, and to all participants for active engagement.
24. The future is not about choosing between traditional and digital. It is about integrating both, and building a trusted financial ecosystem that is more efficient, and more resilient. 
25. Without further ado, let’s start our sharing session.
26. Thank you.

Note: The event was held on 9 March 2026.