Photo credit: HKMA

The Hong Kong Monetary Authority (HKMA) hosted the launch ceremony for Project Ensemble Sandbox on Aug. 28, introducing four main themes of asset tokenization use cases for the initial round of experimentation. 

The four main themes that will be tested on the Project Ensemble Sandbox are Fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance. 

The HKMA has completed building the Sandbox, which will be used for interbank settlement by using experimental tokenized money. 

Participating banks such as Bank of China, HashKey Group, Standard Chartered Bank (Hong Kong), and more have connected their tokenized deposit platforms to the Sandbox. The participating banks will conduct experiments for both interbank payment-versus-payment and delivery-versus-payment settlement. 

According to the press release, the initial round of experimentation will cover the tokenization of both traditional financial assets and real-world assets. HKMA also promised that they will “continue to actively engage with the industry to gauge interest in tokenization, develop new themes, and identify further use cases for tokenization.”

HKMA mentioned that the Securities and Futures Commission (SFC) will develop a regulatory framework for the tokenized asset market in Hong Kong. 

Explaining the reason behind the introduction of the Project Ensemble Sandbox, Mr. Eddie Yue, the Chief Executive of the HKMA, said:

“The introduction of the Project Ensemble Sandbox to test tokenization use cases marks a significant step forward for the HKMA and the industry to explore the application of tokenization in real-life business scenarios.”

Yue claimed that the HKMA will continue to collaborate with SFC, other central banking institutions, and other industry participants to “further drive innovation and progress in the Hong Kong tokenization market.”

Read more: Hong Kong launches gen AI sandbox for banking innovation