HKMA teams up with Thailand, Brazil central banks on cross-border tokenization pilots

The Hong Kong Monetary Authority has partnered with the Bank of Thailand and Banco Central do Brasil to advance cross-border tokenization projects under collaborative initiatives.

Hong Kong’s financial watchdog, the Hong Kong Monetary Authority, has partnered with central banks in Thailand and Brazil to explore cross-border tokenization projects to develop use cases in areas such as trade finance and carbon credits.

In two separate press releases on Monday (October 28), the HKMA said the collaborations will focus on developing use cases for tokenized assets as part of ongoing projects aimed at improving cross-border financial technology integration.

Both institutions will create a proof of concept to investigate “the interoperability of new distributed ledger technology integrated financial market infrastructures,” officials said.

“Expanding our partnership to explore cross-border tokenization use cases further underscores this shared vision.”

Howard Lee, vice president of the HKMA

Under the agreement with the Bank of Thailand, the HKMA will connect the Ensemble Sandbox to BOT’s Project San to test Payment-versus-Payment and Delivery-Versus Payment settlements. The initiatives will cover business payments, carbon credits and other tokenization use cases, the press release said.

Meanwhile, HKMA’s collaboration with Banco Central do Brasil will connect Ensemble Sandbox to Brazil’s Drex pilot platform to carry out similar experiments. The Drex pilot, launched in early September, is part of Brazil’s effort to develop a tokenized financial market and involves more than 70 companies exploring themes such as trade finance and green finance.

According to the press release, the HKMA and BCB plan to conduct cross-border experiments connecting central bank digital currency infrastructures to enhance PvP and DvP payments.