The Hong Kong Monetary Authority (HKMA) has launched a Distributed Ledger Technology (DLT) initiative to assist banks with risks associated with blockchain experiments. On Jan. 8, the HKMA unveiled the ‘Supervisory Incubator’ to support the banking sector with the transformative potential of DLT. The Incubator will focus on tokenized deposits with the Hong Kong Central Bank, offer supervision from a dedicated HKMA team, and provide feedback regarding trials and other risks associated with DLT adoption in the traditional banking system. “Trade finance automation is one key area where DLT could assist in unlocking financial resources. Leveraging tokenized deposits and more real-time risk data, financial resources such as collateral could be freed up in a more agile manner, allowing them to be redeployed to generate incremental returns,” said Carmen Chu, HKMA Executive Director. To continue reading this as well as other DeFi and Web3 news, visit us at thedefiant.io
