The Banque de France (BDF) and the Hong Kong Monetary Authority (HKMA) have signed a Memorandum of Understanding (MoU) to collaborate on wholesale central bank digital currency (CBDC) and tokenization. This partnership builds upon their existing close relationship in promoting financial innovation.

As part of this collaboration, the HKMA will participate in Wave 2 of the European Central Bank (ECB)'s Eurosystem exploratory work on new technologies for wholesale central bank money settlement. This marks an important milestone as a major central banking institution outside the Eurosystem joining the initiative.

The BDF and HKMA will study the interoperability between their respective CBDC infrastructures - the BDF's DL3S and the HKMA's Project Ensemble Sandbox. The focus will be on optimizing the efficiency of real-time cross-border and cross-currency payments, as well as facilitating interoperability between financial market infrastructures in different jurisdictions.

The HKMA launched Project Ensemble earlier this year to explore innovative financial market infrastructure for the seamless interbank settlement of tokenized money through wholesale CBDC. This collaboration with the BDF's DL3S platform is timely and will enable the two central banks to further explore cross-border payment solutions and use cases, promoting financial market connectivity and the development of the global tokenization market.