HKEX, HSBC back ‘mBridge’ digital currency project involving central banks of Hong Kong, China, Thailand and UAE
- Senior executives at HSBC, HKEX tell industry forum that they are ready to test ‘mBridge’, a sovereign digital currency project
- Led by central banks of Hong Kong, China, Thailand and the UAE, ‘mBridge’ will help conduct foreign exchange transactions in real time
Hong Kong’s financial community has given its backing to a sovereign digital currency project being tested by the central banks of Hong Kong and China, saying they are ready to test cross-border financial payments using the blockchain.
Currently, most currency transactions are settled on a “T+2” basis, or two days after the trade. But blockchain technology has enabled near real-time settlement as layers of middlemen are slashed. According to the World Bank, processing fees for cross-border retail fund transfer can on average cost 7 per cent of a transaction’s value, but mBridge can cut that cost by up to half, according to a report released by the four central banks on Tuesday.
“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 Julien Martin, head of emerging business development markets at Hong Kong Exchanges and Clearing (HKEX), the operator of the city’s stock exchange.
The US$46.5 billion wealth link, launched earlier this month, enables residents in nine Guangdong cities to invest in financial products sold by banks in Hong Kong and Macau, and vice versa.