The Hong Kong Monetary Authority (HKMA) has signed a memorandum of understanding with the Bank of Thailand (BOT), in a bid to promote financial technology (fintech) collaborations between the two regulators, according to a Crowdfund Insider report on May 14, 2019.
The Basel Connection
Per sources close to the matter, the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT), the top financial watchdogs in both regions have inked a memorandum of understanding in Basel, to enable both nations to collaborate on financial technology innovations.
Specifically, the MoU which was reportedly signed by Norman Chan, Chief Executive of the HKMA, and Veerathai Santiprabhob, Governor of BOT, the two regulators have hinted that the new alliance will enable them to “collaborate on the referral of fintech businesses, information and experiences sharing, and joint innovation projects.”
As reported by BTCManager earlier in May 2019, the Bank of Thailand collaborated with Wipro, R3 consortium, and eight other leading financial institutions to launch a blockchain-based proof-of-concept aimed at enabling superfast and cost-efficient domestic funds transfer in the nation’s inter-banking system via a central bank digital currency (CBDC).
The HKMA, on the other hand, has also collaborated with the three currency-issuing banks in Hong Kong, the Hong Kong Interbank Clearing Limited and the R3 consortium, to embark on its own CBDC initiative dubbed Project LionRock.
Reportedly, Hong Kong’s Project LionRock aims to entirely understand the feasibility, implications, benefits, as well as the challenges that come with developing a distributed ledger technology (DLT) based CBDC.
To test the capabilities of the CBDC, the HKMA intends to use the digital assets in “settling the domestic inter-bank payments, corporate payments at a wholesale level, and delivery-versus-payment of debt securities settlement.”
Importantly, the HKMA and the BOT have revealed plans to carry out a joint CBDC research project.
Commenting on the latest alliance, Chan stated that this is not the first time the HKMA and the BOT are coming together to conduct a financial project and this latest deal shows the mutual interests of both firms in bringing collaborative fintech initiatives to life.
“The synergies from our alliance will lead to productive outcomes that will be beneficial to all entities,” said Santiprabhob, adding:
“I believe there is great potential to enhance the quality of financial services by leveraging on technological advancement, and it is our responsibilities as regulators to create a conducive environment for innovation to thrive.”
It’s worth noting that Hong Kong and Thailand are not the only forward-thinking nations trying to fix the loopholes in the traditional payments system with cryptocurrency and DLT.
In March 2019, BTCManager informed that the Eastern Caribbean Central Bank had joined forces with Bitt to launch a CBDC pilot project across member nations in the Eastern Caribbean Currency Union (ECCU).