HKMA Forges Tokenization Partnerships with Thailand and Brazil
The Hong Kong Monetary Authority (HKMA) has announced strategic partnerships with the central banks of Thailand and Brazil to explore cross-border tokenization initiatives. These collaborations, revealed on October 28, 2024, mark a major step forward in connecting digital financial infrastructures across continents.
The partnerships will primarily focus on testing Payment versus Payment (PvP) and Delivery versus Payment (DvP) settlement mechanisms through various platforms. The HKMA’s Project Ensemble will interface with Thailand’s Project San and Brazil’s Drex pilot program, exploring use cases in trade finance, carbon credits, and other tokenized assets.
Thailand’s Project San, launched in June 2024, represents an ambitious internal initiative to develop a comprehensive tokenization ecosystem. The project encompasses a wholesale settlement engine and Ethereum-compatible ledgers supporting tokenized private money and assets. “This partnership will significantly advance tokenisation efforts in our financial sectors,” said Alisara Mahasandana, Deputy Governor of Corporate Development at the Bank of Thailand, highlighting the potential for broader insights through different technical designs and regulatory frameworks.
The collaboration with Brazil’s central bank builds upon a cooperation agreement signed in 2018. The Drex pilot program, which entered its second phase in September 2024, has already attracted more than 70 companies from Brazil’s financial sector. “The collaboration with the HKMA is an important step of this new phase in the construction of Drex,” noted Roberto Campos Neto, Governor of the Banco Central do Brasil, emphasizing the symbolic significance of connecting jurisdictions on opposite sides of the globe.
HKMA’s Project Ensemble, launched in August 2024, serves as a testing ground for industry participants across four key areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance. The platform’s integration with both Thailand’s and Brazil’s systems represents a significant step toward creating an interconnected global tokenized financial market.
“The seed of the collaboration between the HKMA and the BCB, planted a few years ago, has now blossomed,” said Eddie Yue, Chief Executive of the HKMA, reflecting on the partnership’s evolution. He emphasized their shared vision of driving the financial industry’s future through technology.
These partnerships represent a continuation of HKMA’s collaborative approach to financial innovation, building upon previous successful projects such as Project Inthanon-LionRock and Project mBridge. As these cross-border initiatives progress, they are expected to yield valuable insights for all participating jurisdictions and potentially shape the future of global digital finance.
