Mastercard and Standard Chartered Bank Hong Kong (SCBHK) have successfully conducted the first live test of Mastercard’s Multi-Token Network (MTN). This proof-of-concept pilot involved tokenizing carbon credits within the Hong Kong Monetary Authority (HKMA) Fintech Supervisory Sandbox. The project demonstrated the potential for using blockchain technology to manage carbon credits more efficiently.

In this initiative, a client from SCBHK’s virtual bank, Mox Bank, deposited funds into their Mox account and requested to purchase a carbon credit. Mox then asked SCBHK to tokenize the carbon credit through Libeara, a tokenization service provider launched by Standard Chartered’s venture arm, SC Ventures. The MTN platform tokenized the deposit, and an atomic swap, which is a real-time exchange across different blockchains, was performed to complete the transaction.

Mastercard launched the MTN in June 2023, built on its private blockchain. The MTN had previously been trialed with the Reserve Bank of Australia using wrapped central bank digital currency (CBDC) and with the HKMA using its e-HKD CBDC. However, neither of these CBDCs is currently live. Helena Chen, Mastercard’s managing director for Hong Kong and Macau, expressed Mastercard’s commitment to supporting Hong Kong’s development as a digital assets hub and advancing the tokenization market.

The HKMA has reportedly been pushing Hong Kong banks, including SCBHK, to improve services for cryptocurrency exchanges. SCBHK is actively involved in the HKMA’s Project Ensemble, its e-HKD pilot program, and the multinational Project mBridge. The e-HKD pilot project has entered its second phase as of March, indicating significant progress in Hong Kong's digital currency initiatives.

In addition to these local efforts, Standard Chartered has been engaged in various international projects. These include collaborations with SWIFT on CBDC initiatives and U.K. Finance using the Regulated Liability Network. In November, SC Ventures established a crypto fund in the United Arab Emirates. Other financial institutions like HSBC and China’s Ant Group have also tested tokenized deposit transactions in the HKMA sandbox, with HSBC offering Bitcoin and Ethereum futures exchange-traded fund trading in Hong Kong.