WEB3
by BSC News
August 25, 2023
The HKMA aims to leverage distributed ledger technology (DLT) to tokenize bank deposits, with a seminar planned for the coming quarter.
Summary
The Hong Kong Monetary Authority has announced it is examining a regulatory framework to govern the digital Hong Kong dollar or stablecoins. With a focus on advancing the use of distributed ledger technology (DLT) within the sector, the authority aims to tokenize bank deposits. A seminar on DLT technology introduction is planned for the upcoming quarter, engaging industry stakeholders.
Vice President Ruan Guoheng clarified that the promotion of deposit tokenization won't be obligatory for all banks, stressing that no fixed timeline has been set. This initiative will run concurrently but independently from the ongoing research on the digital Hong Kong dollar.
Assistant President of Banking Supervision, Chen Jinghong, expressed optimism about DLT's potential in various applications. He highlighted its capacity to shorten bond issuance transaction times to T+1 and enable instantaneous settlement through cash tokenization and smart contracts, thereby reducing counterparty risks.
Acknowledging DLT's present limitations in maturity and stability, Chen Jinghong confirmed plans for ongoing research to address these challenges. He outlined a future where securities, real estate, and mortgage products might also be tokenized, signaling a transformative potential.
With an eye on the evolving financial landscape, Jinghong highlighted the underutilization of wealth and insurance technologies within the banking sector. The opening of cross-border Wealth Management Connect is projected to elevate related technology applications by 30% to 40% in the next three years. Additionally, the “Financial Technology Promotion Plan” held by the Hong Kong administration will see the Securities Regulatory Commission and the Insurance Regulatory Commission provide technical guidelines in accordance with regulatory requirements.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article
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