The Hong Kong regulator announced the creation of a sandbox for wholesale central bank digital currency.

The Hong Kong Monetary Authority (HKMA) has unveiled the Project Ensemble program, which involves the creation of a wholesale central bank digital currency (wCBDC) sandbox. The wCBDC is a digital payment instrument used by financial counterparties and acts as a reserve for the central bank.

The project aims to study the “innovative financial market infrastructure” that contributes to the development of seamless interbank settlement in tokenized means of payment. Initially, the focus will be on the deposit component.

The Hong Kong government has been officially studying wCBDC since 2021. The HKMA has already held two market consultations on issuing a local digital dollar, the e-HKD. However, regulators have yet to decide on a possible date for introducing the new means of payment.

“Project Ensemble forms a key part of the HKMA’s broader portfolio of initiatives to facilitate the development of the tokenization market, comprising e-HKD and collaboration with the BIS Innovation Hub Hong Kong Center such as mBridge, Dynamo, and Genesis.”

Statement via HKMA

The HKMA notes that the new program will create a wCBDC architecture community that includes representatives of public and private organizations. The governing body hopes the efforts will lead to an updated financial market infrastructure that bridges the gap between tokenized real-world assets (RWA) and transaction money.

Last week, a sandbox project was also presented in Hong Kong, allowing institutions to test the issuance of stablecoins. The initiative will test the issuance process, business model, investor protection, and risk management systems of stablecoins.

Source : crypto.news by Anna Kharton / Mar 7, 2024