On 28 August, 2024, the Hong Kong Monetary Authority (HKMA) officially launched the Project Ensemble Sandbox today, for the practical adoption of tokenisation within the financial industry. The launch ceremony introduced four key themes for the initial round of experimentation, focusing on the tokenisation of both traditional financial assets and real-world assets.
The Sandbox has been specifically designed to facilitate interbank settlement using experimental tokenised money, with a focus on transactions involving tokenised assets. Participating banks from the Project Ensemble Architecture Community have connected their tokenised deposit platforms to the Sandbox, enabling them to conduct experiments in payment-versus-payment and delivery-versus-payment settlement processes.
The first round of experimentation within the Sandbox will cover four main theme areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance. According to the HKMA, these areas were selected based on industry interest, market trends, and the potential for innovative impact.
The HKMA is working with the Hong Kong’s Securities and Futures Commission (HK SFC), which is a member of the Project Ensemble Architecture Community and is co-leading efforts to establish regulatory guidelines relating to tokenisation within the asset management industry.
The HKMA plans to collaborate with the BIS Innovation Hub Hong Kong Centre on one or more of the Sandbox themes. The HKMA will also engage with the CBDC Expert Group in relation to the Sandbox and the development of tokenisation technologies.
Mr Eddie Yue, Chief Executive of the HKMA, stated at the launch ceremony on 28 August 2024, “The introduction of the Project Ensemble Sandbox to test tokenisation use cases marks a significant step forward for the HKMA and the industry to explore the application of tokenisation in real-life business scenarios. 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.”
Ms Julia Leung, Chief Executive Officer of the SFC, in her speech at the launch on 28 August 2024 made a statement supporting the efforts “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.”
Project Ensemble aims to explore innovative financial market infrastructure (FMI) to enable seamless interbank settlement using wholesale central bank digital currency (wCBDC). The HKMA, through the Sandbox, intends to assess the technical interoperability of tokenised assets, tokenised deposits, and wCBDC. This initiative is aimed at providing industry participants with the opportunity to conduct end-to-end testing of tokenised asset transactions in real-world business scenarios.
(Source: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/08/20240828-3/, https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR140)
