The Banque de France (BDF) has started collaborating with the Hong Kong Monetary Authority (HKMA) on wholesale central bank digital currency (wCBDC) initiatives. The BDF and the HKMA have been keeping a close relationship in promoting financial innovation.

This collaboration involves the HKMA's participation in Wave 2 of the European Central Bank (ECB)’s Eurosystem exploratory work. This marks a significant milestone, as it is a major central banking institution outside the Eurosystem taking part in the initiative. The two central banking institutions recently entered into a Memorandum of Understanding (MoU), which signified a step forward in bilateral cooperation to foster innovation in wholesale CBDC and tokenisation market.

Explore the interoperability of wholesale CBDC systems The BDF and the HKMA will delve into the study of interoperability between their wholesale CBDC infrastructure, i.e. the former’s DL3S2 and the latter’s Ensemble Sandbox3, with the main focus on real-time cross-border and cross-currency payments. The cross-border experiment aims to explore how to optimise settlement efficiency of cross-border transactions, and facilitate interoperability between financial market infrastructures in different jurisdictions.

Under the MoU, the two central banking institutions agree to improve communication and collaboration, as well as to lay the foundations for further efforts on tokenisation and new technologies. Officials from the BDF said that as they have set the clear objective to improve cross-border payments, they have the opportunity brought by the Eurosystem exploratory work to collaborate with the HKMA on different use cases for payment versus payment between the tokenised form of the Hong Kong dollar and the Euro. The HKMA’s recent announcement for the launch of project Ensemble was very timely to initiate this cooperation.

They look forward to further testing their DL3S platform in this context and hope that together they can facilitate the financial inclusion expected from enhanced cross-border payments. Representatives from the HKMA also stated that it is evident that there is a huge potential for collaboration between France and Hong Kong in various areas. Particularly in the fintech sector, both the BDF and the HKMA have proven themselves as pioneers in the field of CBDC.

The HKMA announced Project Ensemble early in 2024 to explore innovative financial market infrastructure that will facilitate seamless interbank settlement of tokenised money through wholesale CBDC. With the collaboration between BDF’s DL3S and the HKMA’s Ensemble Sandbox underway, they look forward to joining hands with the BDF to further explore different cross-border payment solutions and use cases, to promote financial market connectivity and push forward the development of the global tokenisation market. .