Hong Kong Introduces Project Ensemble for wCBDC Tokenization

The Monetary Authority of Hong Kong (HKMA) has decided to launch a CBDC project that will tokenize deposits in asset-based transactions. This project will issue a wholesale CBDC called wCBDC to enable tokenization. The project is called Ensemble.  The project intends to publish a live CBDC if there is sufficient demand as per a latest statement issued by HKMA.

Utility of wCBDC

In addition to setting the parameters for utility of wCBDC, the project also intends to establish an innovative infrastructure. In the same manner, the project is going to work on tokenized deposits for commercial bank funds. These reserves are to be utilized in tokenized assets. The first step in this project is going to be a creation of sandbox for research and testing purposes.

The agency has retained that tokenization offers various use cases such as settlement of tokenized real-world assets including green bonds, aircrafts, EV stations, electronic bills, and treasury management.

HKMA also founded the wCBDC Architecture Community that would consist of local and multinational banks. The firm has noted that this alliance is going to be inclusive of integral participants and CBDC Expert Group of HKMA.

Participation of Central Banks and International Organizations

HKMA founded the wCBDC group in October and recruited 11 academics from different fields and academic institutions of Hong Kong. At the same time, HKMA is also hiring participants from various Central Banks and International Organizations. The head of HKMA stated that it has invited global talents and industry participants to Hong Kong and join the tokenization sector.  

This announcement does not include Bank of International Settlements participation. However, HKMA declared various BIS projects that it is currently working on namely Projects mBridge, Dynamo, and Genesis. The International Banking Establishment has conducted experiments with local Chinese banks. Some of these test projects are inclusive of pilots conducted in association with HSBC and Hang Seng.

The alliance tested the utility and impact of e-HKD CBDCs. HSBC and Ant Group joined HKMA in another project that discussed the practical use case of tokenized holdings and transfer funds within HSBC network.

HKMA issued a guideline in February regarding the sale and distribution of tokenized products that are not regulated by the Securities and Futures Commission of Hong Kong. The regulatory department is also preparing a legislative framework for stablecoins.

Hong Kong Allocates $383 Million for Cyberport AI Scheme

The government of Hong Kong is working on developing the local AI sector. On this account, the nation intends to establish local universities, research projects, and businesses with AI supercomputing Centers. To this end, the Hong Kong government has allocated a budget of $383 million on Cyberport Business Park. Paul Chan, the financial secretary explained that the project is a 3-year subsidy scheme for AI-projects.

This declaration was part of the 2024 budget announcement on 28th February, Wednesday. The program will grant funding to the AI-development and training institutions to contribute to a supercomputing center.

Speaking with Cointelegraph, Chan noted the importance of AI technology in shaping the next industrial revolution. In addition to helping local entities, this subsidy will also boost cybersecurity and data protection.

At the same time, the state administrators plan to invite global AI experts, companies, and researchers to start projects in Hong Kong. Chan noted that AI Supercomputing Centre will be activated during the ongoing year. The government of Hong Kong intends to establish similar schemes and centers before year-end. Project Cyberport will grant subsidy to various types of AI startups.

Chan shared the details regarding $100 million startup funding to support the Alliance of Universities in Applied Sciences. He noted that the main objective of this alliance is to promote vocational and academic projects that include parents, students, and social units.  

Hong Kong has also announced a $766 million subsidy in categories of health-tech research sent to 8 local universities. Hong Kong administrators have accelerated their efforts to integrate AI tech in healthcare sector.