Banque de France and HKMA Collaborate on CBDC Cross-border Initiatives
The Banque de France and the Hong Kong Monetary Authority (HKMA) have announced their collaboration on wholesale central bank digital currency (CBDC) initiatives on June 27.
Both institutions have a longstanding partnership in fostering financial innovation. The HKMA’s participation in Wave 2 of the European Central Bank (ECB)’s Eurosystem exploratory work is a significant milestone, marking it as a major central banking institution outside the Eurosystem to engage in such initiatives.
The two central banking institutions recently signed a Memorandum of Understanding (MoU) which solidifies their bilateral cooperation, particularly in advancing innovation within the wholesale CBDC and tokenization markets. The collaboration will focus on studying interoperability between their respective wholesale CBDC infrastructures: the Banque de France DL3S and the HKMA’s Project Ensemble Sandbox.
This initiative aims to enhance real-time cross-border and cross-currency payments, exploring methods to optimize settlement efficiency and promote interoperability between financial market infrastructures across different jurisdictions.
In March, the HKMA initiated Project Ensemble to explore asset tokenization and develop a CBDC to facilitate these innovations. Subsequently, the agency formed an Architecture Community comprising Hong Kong regulators, the Bank for International Settlements (BIS), major local banks, HashKey crypto exchange, Ant Digital Technologies, and Microsoft Hong Kong. Research and testing under the project were scheduled to commence in the middle of the year.
Mr. Denis Beau, First Deputy Governor of the BDF, said, “As we have set the clear objective to improve cross-border payments, we have the opportunity brought by the Eurosystem exploratory work to collaborate with the HKMA on different use cases for payment versus payment between the tokenised form of the Hong Kong dollar and the Euro. The HKMA’s recent announcement for the launch of Project Ensemble was very timely to initiate this cooperation. We look forward to further testing our DL3S platform in this context and hope that together we can facilitate the financial inclusion expected from enhanced cross-border payments.”
Mr. Howard Lee, Deputy Chief Executive of the HKMA, added, “It is evident that there is a huge potential for collaboration between France and Hong Kong in various areas. Particularly in the Fintech sector, both the BDF and the HKMA have well proven themselves as pioneers in the field of CBDC. The HKMA announced Project Ensemble early this year to explore innovative financial market infrastructure that will facilitate seamless interbank settlement of tokenised money through wholesale CBDC. With the collaboration between BDF’s DL3S and the HKMA’s Project Ensemble Sandbox underway, we look forward to joining hands with the BDF to further explore different cross-border payment solutions and use cases, to promote financial market connectivity and push forward the development of the global tokenisation market.”
This collaboration underscores their commitment to advancing financial innovation and cross-border payment efficiency through technological integration and strategic cooperation.
