Standard Chartered Bank (Hong Kong) Limited (SCBHK), the international cross-border bank, is making strides in the world of blockchain as it explores the operational and risk management benefits of tokenised deposits to support the settlement of tokenised assets.
This move has been made possible following partnerships signed with Mox Bank Limited, Mastercard and Libeara. Together, the companies have successfully completed a proof-of-concept (POC) pilot to drive fintech innovation and develop the tokenised assets market in Hong Kong. The pilot will be completed under the Hong Kong Monetary Authority (HKMA)ās Fintech Supervisory Sandbox.
Mary Huen, chief executive of SCBHK
Mary Huen, chief executive officer, Hong Kong, Standard Chartered, said: āThe tokenisation of real-world assets and the potential use of different forms of tokenised currency is integral to the future of the financial industry.
āSCBHK is keen to stay at the forefront of tokenisation and drive fintech development in Hong Kong. Together with our partners, we share the objective of catalysing the adoption of tokenisation in financial assets.
āThis POC developed around tokenised carbon credits and tokenised deposits is a testament to how SCBHK supports sustainable finance innovation in Hong Kongās digital economy.ā
The POC pilot
As the first live test of the Mastercard Multi-Token Network (āMTNā), the POC used the following test scenario to explore how this could work in the context of carbon credits:
A Mox client wants to buy a carbon credit to offset his/her personal carbon usage. Therefore, they deposit the funds for this in his/her Mox bank account.
Mox requests SCBHK tokenise the desired carbon credit using Libeara, a tokenisation platform incubated by SC Ventures.
Through the Mastercard MTN, the clientās deposit is also tokenised and an atomic swap is initiated between the two tokenised instruments. Ā
The result is a transparent, real-time transaction between SCBHK and Mox. Consequently, the end client receives access to a tokenised version of their carbon credit. This can be held in a digital wallet, or in this scenario, used to offset his/her carbon footprint.
Utilising Standard Charteredās extensive global network and the strong collaboration between its various business arms, this POC demonstrates the Bankās strategic approach to pool the collective expertise from its partners and drive innovative digital finance solutions.
Building trust in tokenisation and blockchain
SCBHK supports the development of digital assets in Hong Kong. It does so through a variety of key projects, including Project mBridge, Project Ensemble, and the HKMAās e-HKD Pilot Program. Together with its partners, SCBHK continues to explore the possibilities of digital asset-related technologies and contribute to Hong Kongās development as a digital asset hub. Most recently, Libeara has extended its footprint to Hong Kong to better support tokenization projects in the region. Ā Ā
Helena Chen, managing director, Hong Kong and Macau, Mastercard
Mastercard has a wider commitment to helping everyone understand and trust blockchain technology. Especially concerning how it can be used to address pain points and build more efficient systems. This includes working with a range of partners in Hong Kong and around the world. Working with others, Mastercard will deploy innovative technologies to benefit businesses that are looking to exchange value safely and securely.
Helena Chen, managing director, Hong Kong and Macau, Mastercard said: āTo unlock the full potential of blockchain technology, continuous collaboration, testing, exploration, and development of innovative use cases are needed to bring real value to businesses and also interoperability across the industry.
āUsing the Mastercard MTN, Mastercard and its partners are developing real-world applications that reshape how consumers and businesses connect, interact, and transact.ā
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