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

BOT Press Release No. 40/2024 | 29 Oct 2024

The Bank of Thailand (BOT) announced today (29 October) its collaboration with the Hong Kong Monetary Authority (HKMA) to explore cross-border tokenisation use cases under Project San[1] and Project Ensemble. 

 

The BOT and the HKMA 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 BOT and the HKMA 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 BOT and the HKMA will test a link between DLT FMIs under Project San and the HKMA’s Project Ensemble.  

 

Project San, an internal initiative started in June this year, 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.

 

The HKMA's Ensemble Sandbox, launched in August 2024, 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.

 

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."

 

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.”

 

Bank of Thailand

29 October 2024

 


[1] Thai for "message, orchestration or coordination"
[2] For further details, please refer to the press release on 14 May 2019: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2019/05/20190514-3/

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

Contact for more information

Digital Currency Policy and Development Unit

+66 2356 7077, +66 2356 7079

DigitalCurrencyTeam@bot.or.th

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