The HKMA has initiated support for banks implementing distributed ledger technology (DLT), with a primary focus on tokenized deposits. By conducting live trials with local banks, they aim to understand and improve banks’ risk management systems. This effort is designed to promote the safe and efficient integration of DLT into banking operations.

The Supervisory Incubator initiative will enhance industry growth by sharing best practices and providing supervisory guidance. According to Carmen Chu from HKMA, this could unlock innovative financial products with smart contracts, tailored to specific industry needs. The initiative is expected to bring new transactional methods surpassing traditional finance systems.