Hong Kong, Thai regulators hint at possible collaboration on central bank digital currency
The Hong Kong Monetary Authority and the Bank of Thailand have entered into a Memorandum of Understanding to foster fintech collaboration.
The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) have entered into a Memorandum of Understanding (MoU) in order to spur collaboration between the two regulatory authorities in promoting financial innovation.
Under the MoU, the HKMA and BOT may collaborate on referral of innovative businesses, information and experience sharing, and joint innovation projects. One potential collaboration under consideration by the two authorities is a joint research project on Central Bank Digital Currency (CBDC). The regulators note that such a collaboration may benefit from the knowledge and experience they gained from their respective CBDC research studies, namely Project LionRock of the HKMA and Project Inthanon of BOT.
Project LionRock was conducted by the HKMA in partnership with the three note-issuing banks in Hong Kong, the Hong Kong Interbank Clearing Limited and the R3 consortium. The study aims to better understand the feasibility, implications, benefits and challenges of implementing a CBDC on a Distributed Ledger Technology (DLT) platform through exploring its use in domestic inter-bank payments, corporate payments at wholesale level, and delivery-versus-payment of debt securities settlement.
Hong Kong has been open to the development of new financial technologies. Its approach to virtual assets has also been open-minded. In November 2018, the Hong Kong Securities and Futures Commission (SFC) provided details on its approach to virtual asset portfolios managers, fund distributors and trading platform operators. In the initial exploratory stage, the SFC would not grant a licence to platform operators. Instead, it would discuss its expected regulatory standards with platform operators and observe the live operations of the virtual asset trading platforms in light of these standards. The SFC said it would critically consider whether the virtual asset trading platforms are, in fact, appropriate to be regulated by the SFC in light of the performance of these trading platforms in the Sandbox.