At a FinTech event held by the Hong Kong Monetary Authority (HKMA), Hong Kong’s banking regulator and central bank announced a new collaboration with Singapore. The alliance is set to focus primarily on a strategic project based on trade finance cross-border infrastructure, using distributed ledger technology (DLT), and will focus on building a Hong Kong DLT Trade Finance platform.
The CEO of HKMA, Norman Chan Tak-lam, states the joint project with the Monetary Authority of Singapore (MAS) will concentrate on a proof-of-concept DLT named the Hong Kong Trade Finance Platform (HKTFP).
There has already been involvement from seven large Hong Kong-based banking institutions, the objective of the project is to digitize trade documents to reduce the risk of fraud in the banking industry. Ultimately, it’s goal is aimed at a cross-border infrastructure between HKTFP and Singapore.
According to the South China Morning Post, Chan described this initiative as a “breakthrough’ for distributed ledger technology, stating:
“We firmly believe that the time has come for trade finance to move into the digital era.”
The CEO also declared various other plans they’re working on to boost collaboration between Hong Kong and the Shenzhen, another Chinese city. This collaboration would make it easier for Fintech to operate in both jurisdictions.
Hong Kong’s Law Society and HKMA’s Applied Science and Technology Research Institute has published a DLT white paper in addition to its collaboration. The White paper addresses the potential of its tech but making it a point to acknowledge that it couldn’t be a “universal solution” for all financial applications. According to Chan, the research serves as an “essential building block” helping to drive innovations in finance, as well as contributing to the development of “smart banking” in Hong Kong.
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