Hong Kong’s Project Ensemble sandbox ready to test asset tokenization

The Hong Kong Monetary Authority (HKMA) launched the Project Ensemble sandbox on Aug. 28. Established in March, the project studies real-world asset tokenization and interbank settlement using a wholesale central bank digital currency (wCBDC).

The HKMA said the project seeks to examine technical interoperability among tokenized assets, tokenized deposits and a wCBDC. It will concentrate on four areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance. 

Big banks and regulators working together

The HKMA emphasized the role of the Hong Kong Securities and Futures Commission (SFC) in the project. The SFC will co-lead parts of it. SFC CEO Julia Leung 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.”

The Bank for International Settlement Innovation Hub Hong Kong Centre is also a participant in Project Ensemble, and HKMA CEO Eddie Yue mentioned the project’s earlier collaboration with the Banque de France (BDF) at the launch ceremony. However, there was no sign of the BDF’s continuing participation.

The Bank of China (Hong Kong), Hang Seng Bank, Hong Kong and Shanghai Banking Corporation (HSBC), Standard Chartered Hong Kong, HashKey Group, Ant Digital Technologies and Microsoft Hong Kong are members of the Project Ensemble Architecture Community .

Real-world applications already seen

The Ant Group subsidiary will continue to be active in green and sustainable finance and trade and supply chain finance. Longshine Technology Group has already used Ant Group technology to digitize 9,000 charging piles as real-world assets within the project. As a result, Longshine secured financing in Hong Kong, the group  said  in a separate statement. Its tokenized asset platform was also used to settle an electronic bill of lading within the project.

Source: Hong Kong Monetary Authority

Related: Hong Kong begins phase 2 of CBDC pilot

Project Ensemble  was initiated in March . It is the culmination of several previous projects, including testing the settlement of tokenized deposits with HSBC using Ant Group technology and settlement using the HKMA’s pilot e-HKD CBDC for settlement between HSBC and Hang Seng Bank.

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