On 27 June 2024, the Banque de France (BDF) and the HKMA announced their collaboration in relation to wholesale central bank digital currency (CBDC).

This latest collaboration between the two regulators is the HKMA’s participation in Wave 2 of the European Central Bank’s (ECB) Eurosystem exploratory work. The BDF and HKMA recently entered into a Memorandum of Understanding (MoU), which they noted signified a step forward in bilateral cooperation to foster innovation in the wholesale CBDC and tokenisation market. Under the MoU, the BDF and the HKMA agree to strengthen communication and collaboration, as well as to lay the foundations for further efforts on tokenisation and new technologies.

The BDF and HKMA will look at the study of interoperability between their wholesale CBDC infrastructure, i.e. the BDF’s DL3S and the HKMA’s Project Ensemble Sandbox, with the main focus on real-time cross-border and cross-currency payments.  The cross-border experiment aims to explore how to optimise settlement efficiency of cross-border transactions and facilitate interoperability between financial market infrastructures in different jurisdictions.

Commenting on the announcement, the HKMA’s Deputy Chief Executive, Mr Howard Lee, said, “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.”