The Hong Kong government has initiated a partnership with Chainlink, utilizing its Cross-Chain Interoperability Protocol (CCIP), to advance Phase Two of its central bank digital currency (CBDC) pilot project. The initiative explores seamless cross-border transactions and settlements combining permissioned and permissionless blockchains.
This pilot involves a hypothetical scenario where an Australian investor can purchase tokenized assets in Hong Kong using a stablecoin pegged to the Australian dollar (ASDC). The transaction is executed across multiple blockchain systems and settles into the investor's wallet denominated in Hong Kong's digital currency, e-HKD. Visa, ANZ, China Asset Management, and Fidelity International are key partners supporting this project, which utilizes the Ethereum Sepolia testnet.
The pilot demonstrates secure, real-time swaps between a state-backed CBDC (e-HKD) and a commercial stablecoin (ASDC) using smart contracts without intermediary banks or traditional clearing houses. The protocol reduces settlement risks and eliminates custodial or off-chain reconciliation layers. This approach establishes a foundation for compliant, programmable money within hybrid blockchain ecosystems.
The Hong Kong Monetary Authority began Phase Two of the e-HKD program in late 2024, with multiple groups testing use cases expected to conclude by the end of 2025. The project highlights growing collaboration between traditional financial institutions and decentralized finance (DeFi), supporting the integration of blockchain technology in regulated environments.
While global enthusiasm for CBDCs appears to be cooling, Hong Kong and several other regions, including Israel and the EU, continue to push forward with digital currency development. This pilot’s success may serve as a scalable model for future digital currency trials and cross-border programmable money settlements.