Key Points of the Article:
- The Banque de France (BDF) and the Hong Kong Monetary Authority (HKMA) announce a collaboration on central bank digital currency (CBNC) and tokenization.
- The two institutions will explore the interoperability of their MNBC infrastructures to improve cross-border payments.
- A Memorandum of Understanding (MoU) was signed to strengthen bilateral cooperation and innovation efforts.
As the digital euro project slowly moves forward, the Banque de France (BDF) and the Hong Kong Monetary Authority (HKMA) recently announced a strategic collaboration to explore the opportunities offered by central bank digital currency (CBDC) and tokenization. The goal? To strengthen global efforts to optimize cross-border payments and enhance the interoperability of financial infrastructures. Explanations.
Hong Kong and France collaborate on MNBC
For several years, the BDF and the HKMA maintain a close partnership aimed at promoting financial innovation. HKMA even participated in the second wave of the Eurosystem’s exploratory work on the European Central Bank (ECB) which demonstrates the importance of this collaboration.
In fact, this project will make it possible to test theinteroperability between the platform DL3S of the BDF and the Sandbox Ensemble Project of the HKMA, with a focus on real-time, multi-currency cross-border payments.
Denis Beau, First Deputy Governor of the BDF, expressed his enthusiasm for this collaboration by declaring:
“We have the opportunity, thanks to the exploratory work of the Eurosystem, to collaborate with the HKMA on varied use cases for payment against payment between the tokenized form of the Hong Kong dollar and the euro. »
Cryptocurrencies in Hong Kong: The “together” project inspires
The Ensemble Project, launched by the HKMA, is an initiative to explore use case for financial market infrastructures to enable healthy development of MNBCs. This project brings together various stakeholders, including regulators, local banks, technology companies like Microsoft Hong Kong, and exchanges.
We suspect that this project is being closely followed by the Chine which has also set some milestones and marked its territory in Hong Kong with the deployment of its e-CNY.
Howard Lee, Deputy Chief Executive of the HKMA, highlighted the enormous potential of this collaboration:
“The collaboration between the BDF and the HKMA represents enormous potential for innovation in the Fintech sector, particularly with regard to CBDC. »
Interoperability and efficiency of cross-border payments
Under the signed MoU, the BDF and the HKMA commit to strengthen communication and collaboration to enhance the interoperability of MNB infrastructure.
L’primary objective is to optimize theefficiency of cross-border transaction settlementfacilitating financial market connectivity and promoting financial inclusion globally.
In this regard, the HKMA, with its e-HKD project, has already taken steps to test various applications and usages of MNBC. This collaboration with the BDF will further test the capabilities of the DL3S platform in an international context, thus exploring new avenues to improve cross-border payments.
As cryptocurrencies gain ground around the world, states are getting into battle formation to prepare their regulation and make the leap to their central bank digital currency. However, this increased proximity to Hong Kong, located in the heart of China’s sphere of influence, raises questions. Indeed, China was one of the first major economies to develop and test a digital currency, the digital yuan. This collaboration could be seen as an indirect way of getting closer to Chinese financial infrastructures, posing challenges in terms of digital sovereignty, economic competitiveness and individual freedoms.
