Collaboration between Hong Kong and the central banks of Brazil and Thailand for tokenization, facilitating the distribution of digital bond incentives

Hong Kong, Brazil, and Thailand Collaborate on Digital Currencies and Green Bonds

In a significant move to foster innovation and collaboration in the digital asset and central bank digital currencies (CBDC) space, the Hong Kong Monetary Authority (HKMA), Brazil's central bank, and Thailand's central bank have joined forces. The collaboration aims to explore the use of CBDCs for wholesale transactions, including cross-border tokenization.

The partnership includes the implementation of atomic settlement for digital asset transactions and the use of payment versus payment, a system where payment and settlement occur simultaneously. This ensures that each transaction is final and irreversible.

The HKMA's efforts to promote digital bond issuances are part of a broader plan to establish Hong Kong as a global hub for digital assets and green finance. The authority has announced grants of up to HK$2.5 million for digital bond issuances, with guidelines for a new Digital Bond Grant Scheme expected to be published soon.

Hong Kong has already made strides in the digital bond market, having issued two tokenized green bond issuances in the past. One of these issuances was natively digital, while the other was a conventional primary issuance that was tokenized. The second tokenized green bond issuance was worth more than US$750 million across multiple currencies, making it the largest digital bond at the time, but since eclipsed by two KfW issuances.

The collaboration between the HKMA, Brazil's central bank, and Thailand's central bank also extends to exploring cross-border tokenization for wholesale transactions. The goal is to facilitate seamless and efficient cross-border transactions in the digital asset space.

As the world continues to embrace digital technologies, initiatives like this one are crucial in shaping the future of finance. The HKMA, Brazil's central bank, and Thailand's central bank's collaboration is a testament to the growing global interest in digital currencies and the potential they hold for transforming financial systems.

Collaboration between Hong Kong and the central banks of Brazil and Thailand for tokenization, facilitating the distribution of digital bond incentives