The Hong Kong Monetary Authority (HKMA) launched Project Sage on Monday, an initiative designed to explore the application of AI agents within the financial services sector.
Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), stated that tokenisation has already progressed from the sandbox environment "into the real world".
The HKMA also announced plans to advance Project Ensemble, its tokenisation sandbox, into "a new stage".
Under this initiative, the HKMA said tokenised central bank money would serve as a "foundation layer" for cross-border settlements that operate around the clock. The city introduced its first five-year fintech strategy, known as Fintech 2030, during FinTech Week last year.
The HKMA intends to establish a link between the Faster Payment System (FPS) of Hong Kong and UnionPay International in mainland China by the end of the year. This connection would allow users of the FPS to pay merchants in destinations like Taiwan and Japan by scanning QR codes, the HKMA said.
Government officials remarked in April that the city's "momentum had never been stronger".
Robert Lui, Hong Kong digital asset leader at Deloitte China, said one of the city's primary challenges is "managing the transition from establishing a robust regulatory foundation to driving commercial market activity". A report released on Monday by blockchain data provider OnChain Benchmark revealed that El Salvador issued more than US$182.8 billion of global US dollar-backed stablecoins.
The data showed US$79.4 billion of those coins originated from the United States, while Singapore accounted for US$3.2 billion, according to OnChain Benchmark. Hong Kong contributed only about US$305 million to the total, with the Asia-Pacific region representing just 1.2 per cent of global US dollar-backed stablecoin issuance, OnChain Benchmark reported.
OnChain Benchmark noted that no Asian stablecoin regulator would be in charge if USDT were to fail. Hong Kong has issued stablecoin licences to only two companies so far: HSBC and Anchorpoint Financial, which is backed by Standard Chartered. Last week, HSBC launched RedCoin, a stablecoin backed by the Hong Kong dollar, for use via its PayMe mobile wallet.
Jennifer Wu, a Hong Kong partner at law firm Holman Fenwick Willan, said Hong Kong dollar-backed stablecoins "would not be a replacement" for major US dollar-backed assets like USDT and USDC.
Wu stated that these coins would instead "provide ease of cross-border payments for those already trading" in Hong Kong dollars. She added that Hong Kong dollar-backed stablecoins could serve as a practical alternative in specific corridors, such as trade between Hong Kong and other Asian markets including those along the Belt and Road.
Kristi Swartz, a partner at global law firm DLA Piper, said the outlook for the city's fintech industry remains positive if it can integrate fintech more deeply into mainstream finance over the next five years.
