PolyU supports HKMA launching ‘Project Ensemble’: a new wholesale central bank digital currency project

The Hong Kong Monetary Authority (HKMA) has announced the commencement of Project Ensemble, a new wholesale Central Bank Digital Currency (wCBDC) project to support the development of the tokenisation market in Hong Kong. Since the establishment of the CBDC Expert Group, along with other members, two PolyU professors of the Department of Computing have been closely collaborating with HKMA to examine various aspects of CBDCs and related digital currencies, such as interoperability, security, and privacy.

The new project will seek to explore innovative financial market infrastructure (FMI) that will facilitate seamless interbank settlement of tokenised money through wCBDC. The Project will initially focus on tokenised deposits, which are a digital representation of commercial bank deposits, issued and made available by commercial banks.

At the core of Project Ensemble is a wCBDC Sandbox that the HKMA will launch this year to further research and test tokenisation use cases including settlement of tokenised real-world assets (e.g. green bonds, carbon credits, aircraft, electric vehicle charging stations, electronic bills of lading and treasury management). This could potentially forge a new FMI that bridges the existing gap between tokenised real-world assets and money in transactions.

To help set industry standards and a future-proof strategy, the HKMA will form a wCBDC Architecture Community comprising local and multinational banks, key players in the digital asset industry, technology companies and the CBDC Expert Group.

Prof. Allen Man Ho AU and Prof. Daniel Xiapu LUO, Professors of the Department of Computing and founding members of the CBDC Expert Group, have been working in collaboration with HKMA on ongoing projects to advance the development of CBDC in Hong Kong. Their aim is to integrate advanced privacy designs that protect consumers’ personal identifiable information, while maintaining a balance between privacy and traceability. They will maintain close collaboration with HKMA and fellow expert group members, aiming to foster the tokenisation market and draw talents to Hong Kong.

Prof. H.C. MAN, Dean of the Faculty of Engineering, said, “This partnership with HKMA is a testament to our commitment to fostering innovation and technological progression, advancing the digital finance landscape in Hong Kong. We are leveraging our expertise to support the launch of this Project Ensemble and look forward to the potential breakthroughs that will, with the introduction of the wCBDC sandbox, shape the digital asset market.”

Prof. Qing Li, Head of the Department of Computing, stated, “The exploration of wCBDC and tokenisation of assets is a critical step towards a future-proof financial infrastructure. Our department is pleased to contribute our expertise to this pioneering initiative.”

Prof. Allen Au and Prof. Daniel Luo said, “wCBDC and digital assets are a significant step towards the future of finance and FinTech innovation, while the tokenisation of currency and assets is a global trend that we cannot ignore. Through this initiative, we are dedicated to playing a role in fostering the development of a robust digital asset ecosystem in Hong Kong.”

 

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