The Hong Kong Monetary Authority (HKMA) has officially launched the Project Ensemble Sandbox to advance tokenisation within the financial sector.
The sandbox, now fully operational after the HKMA completed its setup, is designed to facilitate seamless interbank settlements using tokenised money through wholesale central bank digital currency (wCBDC).
It serves as a platform for experimenting with the application of tokenised assets in real-world financial transactions.
Through the sandbox, the HKMA aims to examine technical interoperability among tokenised assets, tokenised deposits, and wCBDC, enabling industry participants to conduct end-to-end testing in practical business scenarios.
The initial phase will explore tokenisation across four key areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance.
The Securities and Futures Commission (SFC), a key participant in the Project Ensemble Architecture Community, is collaborating with the HKMA to develop a regulatory framework that will support the sustainable growth of the tokenised asset market in Hong Kong.
The SFC will co-lead efforts with the HKMA to promote the adoption of tokenisation in the asset management industry.
On an international scale, the HKMA intends to collaborate with the BIS Innovation Hub Hong Kong Centre on various themes and engage the CBDC Expert Group to further advance the sandbox’s capabilities.
Ant International, a global digital payment and financial technology provider, has joined the sandbox.
The company will focus on global liquidity management through its Whale platform, which leverages blockchain technology, advanced encryption, and AI to enhance fund movement efficiency.
Moving forward, Ant International will collaborate with Standard Chartered Bank (Hong Kong) Limited and HSBC to develop a real-time cross-border payments solution.
Kelvin Li, Head of Platform Tech at Ant International, noted that the company is working with the HKMA to combine their experience and solutions in developing tokenisation technology.
Meanwhile, HashKey Group, an operator in Hong Kong’s licensed cryptocurrency exchange market, is set to pilot tokenisation and trading of real-world assets such as carbon credits, green assets, and Money Market Funds (MMF) through the sandbox.
Dr. Xiao Feng, Chairman and CEO of HashKey Group, emphasized the company’s role in bridging traditional financial markets with Web 3.0, enhancing fiat system automation, and promoting financial inclusion.
The HKMA plans to continue working with industry participants to explore new themes and use cases for tokenisation.
Eddie Yue, Chief Executive of the HKMA, said,
“Since the launch of Project Ensemble in March, we have been encouraged by the strong interest from the industry in pioneering innovative solutions to redefine the digital finance landscape.
The HKMA looks forward to collaborating with the SFC, other central banking institutions, academia, and all relevant industry participants to further drive innovation and progress in the Hong Kong tokenisation market.”
Julia Leung, Chief Executive Officer of the SFC, said
“The sandbox launch today is a clear example of how innovation and regulation can go hand in hand to blaze a new path for our financial markets.
As two major architects of Hong Kong’s financial markets, the SFC and the HKMA share the same vision and dedication to future-proofing the city’s financial system through innovative market infrastructure.”
Featured image: Members of the Project Ensemble Architecture Community join the launch ceremony for Project Ensemble Sandbox.