- A variety of financial services organisations in Hong Kong have confirmed that they will support a new digital currency project.
- The proposed project, known as mBridge, will see central banking institutions in countries such as Thailand and China work together.
- “With central bank digital currency platforms like mBridge ... we can accelerate these foreign exchange payments, making it less costly and more energy efficient in usage,” said a Hong Kong Exchanges and Clearing (HKEX) spokesperson.
A range of financial institutions in Hong Kong have announced support for a major digital currency project.
The project, known as mBridge, will see central banks in countries such as China, Thailand, Hong Kong and the United Arab Emirates partner to improve cross-border payments.
mBridge could allow for a wide range of foreign exchange transactions to be conducted instantly.
It is also believed that it could help companies to lower costs.
These assertions were made at the recent Treasury Markets Association’s annual conference and summit.
It comes after increased recognition that most currency exchanges do not currently settle until two days after the trade has taken place.
The new plan will see blockchain-powered technologies bring about almost instant settlement.
Julien Martin, who serves as head of emerging business development markets at Hong Kong Exchanges and Clearing (HKEX), said that central bank digital currency platforms would prove to be useful.
“With central bank digital currency platforms like mBridge ... we can accelerate these foreign exchange payments, making it less costly and more energy efficient in usage,” he said.
HSBC, a ‘note-issuing’ bank in Hong Kong, is also in support of the new move.
It said that it was at a stage where it could begin to experiment with the central bank digital currency.
However, one of HSBC’s senior figures also sounded a note of caution.
Lewis Sun, who serves as head of product management, global liquidity, and cash management for Asia-Pacific at HSBC, said that banks needed to get more of a steer from regulators.
“One challenge is regulatory ambiguity, as banks are highly regulated and we are only allowed a low level of ambiguity,” he said.
He went on to say that regulators ought to be more involved in some of the questions around the credit creation process.
“We need to continue to engage with regulators [to better understand] the impact on credit creation, and the accounting treatment of central bank digital currency.”
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