- The HKMA’s latest e-HKD report reveals insights from 11 experimental pilots, including a cross-chain initiative powered by Chainlink.
- Chainlink’s CCIP is used in this pilot to securely bridge transactions between different blockchain networks.
The Hong Kong Central Bank Authority (HKMA) continues to consider a digital version of the electronic Hong Kong dollar, called e-HKD. The HKMA launched its first e-HKD pilot in 2023 to explore how central bank digital currencies (CBDCs) work in practice.
In September 2024, the project expanded into Phase 2 and was renamed e-HKD+ to test more advanced scenarios including tokenized assets, programmability, and interoperability. Just yesterday, the Hong Kong Monetary Authority announced the completion of the e-HKD pilot program and released a report outlining the future direction of e-HKD.
Of the several pilot consortia, 11 in total, one group consists of Visa, ANZ, ChinaAMC (Hong Kong), and Fidelity International, which focuses on cross-border payments of tokenized assets between Australia and Hong Kong.
The goal of this use case is to enable Australian-based investors to purchase units of Hong Kong-based tokenized money market funds (MMFs) using e-HKD or tokenized deposits with near real-time settlement, removing the friction of traditional cross-border payments.
Chainlink’s role: CCIP and compliance
Chainlink’s advanced features, particularly its Cross-Chain Interoperability Protocol (CCIP), will play a key role in this pilot by enabling secure and regulated transactions between different blockchain networks.
In a post to X, Chainlink explained:
By unifying these capabilities under a single standard, Chainlink enables institutional-level tokenized asset transactions to be performed end-to-end at scale, enabling the next generation of regulated tokenized finance.
Several specific features of Chainlink contribute to cross-chain messaging and payments. This allows value and data to be moved between permissioned networks such as private banking systems and public blockchains such as Ethereum.
We also help enforce automated compliance by integrating KYC and AML checks directly into on-chain processes, ensuring all token movements comply with regulatory standards.
Previously, we highlighted that CCIP enables atomic payments, or delivery versus payment (DvP). This means that the exchange of e-HKD or stablecoins and the delivery of tokenized assets occur simultaneously, reducing counterparty risk and ensuring transactions are completed efficiently.
In practice, the pilot connected ANZ’s private chain infrastructure (called “DASChain”) to the public testnet (Ethereum Sepolia) via CCIP, allowing Australian investors to exchange Australian dollar-pegged stablecoin (A$DC) to e-HKD and invest it in tokenized MMFs.
Visa’s Tokenized Asset Platform (VTAP) will serve as the primary intermediary in the pilot, providing an API that allows institutions to mint, write, and transfer tokens on both permissioned and public blockchain networks. The market for tokenized funds is predicted to reach US$2 trillion by 2030, and insights from this pilot will play a role in shaping the framework for digital finance.
Beyond the e-HKD initiative, Chainlink has collaborated with other institutions such as SWIFT, DTCC, Euroclear, UBS, and the US Department of Commerce to expand its influence in the tokenization of the traditional financial system (TradFi).
Recently, Chainlink also partnered with Balcony to integrate its Chainlink Runtime Environment (CRE) into Balcony’s Keystone platform. As part of the partnership, Balcony will bring more than $240 billion worth of real estate assets to the blockchain.
Chainlink’s native token, LINK, has seen some short-term volatility recently. 3% drop Up to $17.70. Still, the network has now secured more than $62.39 billion in total, with Aave V3 accounting for 62.53% of that amount.
