Trust and interoperability critical for digital finance
Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority, outlined the HKMA's strategy for digital finance at the Hong Kong Digital Finance Summit 2026. He emphasized that maintaining trust and ensuring interoperability are central to the evolution of money in the digital age.
HKMA's triple mandate in digital era
The HKMA defines its role in digital finance through three responsibilities: providing central bank money in new forms, setting guardrails for private sector innovation, and building common infrastructure.
The authority has actively explored central bank digital currencies (CBDCs) since 2017 with Project LionRock, which evolved into the multi-jurisdictional Project mBridge, reaching minimum viable product stage in mid-2024.
The e-HKD Pilot Programme provided insights into retail and corporate use cases, with the current priority shifting to wholesale applications.
Notably, tokenised government green bonds have served as a proving ground, with the third issuance in November integrating e-CNY and e-HKD for settlement, marking a global first for digital bonds.
From regulation to interoperable infrastructure
Alongside CBDC efforts, the HKMA has shaped the regulatory framework for private digital money, particularly stablecoins.
Hong Kong's Stablecoins Ordinance came into full effect in August last year, with two stablecoin issuer licenses granted last month.
These licensed entities plan to issue HKD-referenced stablecoins for various use cases, with launches expected in the coming months.
The HKMA maintains a high licensing threshold due to inherent risks and the need for user protection.
Project Ensemble, the HKMA's initiative for interoperable digital asset ecosystems, has transitioned into a pilot stage (EnsembleTX) with real value transactions, leveraging Hong Kong's existing RTGS system for interbank settlement.
Pragmatic steps, long road ahead
The HKMA's approach to digital finance is a pragmatic, collaborative effort to build foundational trust and interoperability, rather than chasing speculative trends.
While significant progress has been made, substantial challenges remain in transitioning from the 'digital twin' model to 'digitally native' issuance, where tokens are the primary record of ownership.
Furthermore, addressing potential fragmentation across platforms requires robust standards and a shared taxonomy, underscoring the necessity for sustained public-private-academic partnerships to fully realize tokenisation's promise.