The Banque de France (BDF), France’s central bank, and the HKMA said on Thursday that they had signed an agreement to work together on development of wholesale central bank digital currency (CBDC).
From July to November, HKMA will participate in the second stage of exploratory work in a test environment where the Eurosystem – the European Central Bank and the national central banks of the countries using the Euro – are experimenting with cross-border money transfers and the settlement of trades in different types of tokenised assets.
“This marks an important milestone as HKMA will be the only major central banking institution outside the Eurosystem participating in the initiative,” Colin Pou Hak-wan, executive director of HKMA, said in a media briefing on Thursday.
“As we have set the clear objective to improve cross-border payments, we have the opportunity, brought by the Eurosystem exploratory work, to collaborate with the HKMA on different use cases for payment versus payment between the tokenised form of the Hong Kong dollar and the Euro,” Denis Beau, first deputy governor of the BDF, said in a statement issued by the HKMA.
“HKMA’s recent announcement of the launch of Project Ensemble was very timely to initiate this cooperation. We look forward to further testing our DL3S platform in this context and hope that together we can facilitate the financial inclusion expected from enhanced cross-border payments.”
Howard Lee, deputy CEO of HKMA, met Beau in Paris this week to further discuss the work.
“It is evident that there is a huge potential for collaboration between France and Hong Kong in various areas,” Lee said in the HKMA statement. “Particularly in the fintech sector, both the BDF and the HKMA have well proven themselves as pioneers in the field of CBDC.”
The two central banks will explore different cross-border payment solutions, promote financial market connectivity, and push forward the development of the global tokenisation market, Lee said.
Started in 2021, mBridge allows the central banks and the Bank for International Settlements Innovation Hub to use digital currencies built on distributed ledger technology to enable instant cross-border payments and settlement.
Pou said the cooperation with the BDF and the Eurosystem tests are separate from the mBridge project, but he would not rule out opportunities for different platforms to collaborate in the future.