Hong Kong Starts Live Pilot for Tokenized Settlement

• Hong Kong’s EnsembleTX brings tokenized deposits into live settlement with real value.
• Pilot supports daily liquidity, linking banks and regulators for institutional adoption.
• Regional tokenization efforts grow as Hong Kong pushes ahead with interoperable systems.

Hong Kong moved its tokenized deposit work into a live pilot as the Hong Kong Monetary Authority launched EnsembleTX to settle real-value transactions. The initiative began in Hong Kong after last year’s sandbox tests and now involves major banks and regulators. It aims to create a production-grade blockchain settlement that supports institutional use and instant on-chain payments across markets.

Change from Sandbox Tests to Real Settlement

The pilot is a change from controlled experiments to a settlement that carries real value, according to HKMA Chief Executive Eddie Yue. The Ensemble Sandbox, which since August 2024, has allowed banks and partners to test digital asset settlement with experimental tokenized deposits. However, now the HKMA intends to integrate tokenized money market funds and real-time liquidity management, two functions important to institutional finance.

This progression sets up the infrastructure for long-term improvements. EnsembleTX will operate through next year and link with the Hong Kong dollar Real Time Gross Settlement system. The HKMA plans to upgrade the environment to support 24/7 settlement in tokenized central bank money. This approach keeps the project aligned with live operational demands while maintaining oversight.

Tokenized Deposits as Cash Tool

This pilot positions tokenized deposits as a regulated bank-issued cash instrument that can move instantly across networks. The HKMA describes the model as a bridge between traditional banking and digital assets because the deposits retain bank liability while operating on an on-chain system. 

This design differs from stablecoins and CBDCs and gives institutions a tool that functions within existing banking rules. The Securities and Futures Commission supported that point with CEO Julia Leung saying interoperability will determine how tokenized products scale. 

She noted that real-time interbank settlement, running continuously, gives institutions the foundation to move funds across multiple platforms. Her comments link with the effort to build a wider tokenization market that covers asset classes and treasury functions.

This direction also shows Hong Kong’s intent to accelerate ahead of other Asian financial centers. Singapore recently announced plans to test tokenized MAS bills settled with a central bank digital currency, while Japan continues to set its tokenized deposit rules. 

However, Hong Kong has already moved past early experiments and entered live implementation, setting one of the first real-world benchmarks for interoperable bank-issued digital money in the region.

Related: Hong Kong Deepens Digital Bond Drive With Third Blockchain Offering

Regional Momentum 

The pilot comes as regional institutions expand blockchain settlement networks. Singapore’s DBS and Kinexys by J.P. Morgan said last week that they are developing an interoperability framework to support tokenized deposit transfers across blockchain networks. Their work shows how Asia’s financial firms are pushing toward cross-market settlement that runs on shared standards.

Hong Kong’s wider market activity has also continued to draw institutional activity. The city issued a record HK$10 billion tokenized green bond earlier this year, attracting HK$130 billion in bids from institutional investors. 

That bond settled in e-HKD or e-CNY, linking government debt to both domestic and cross-border digital payment systems. It also showed how tokenization can operate at a large scale with regulated participation.

Additional firms have expanded their footprint in the city. Adams Street Partners opened a Hong Kong office in November, while Aquilius launched its Hong Kong branch and hired Martin Yung and Patrick Qian to support private-equity work. 

These moves show that international capital firms continue to build operations in the market as Hong Kong invests in tokenization and infrastructure. UBS and Ant International also improved their collaboration by signing a memorandum of understanding to explore work on tokenized deposits. 

They will connect UBS’s Digital Cash platform with Ant’s Whale blockchain to improve cross-border payments and liquidity operations. UBS Singapore Country Head Young Jin Yee said the effort aims to support real-time solutions across multiple currencies.

Meanwhile, Hong Kong’s switch from sandbox tests to live settlement places tokenized deposits in a production setting that supports institutional needs. The pilot links banks, regulators, and major platforms as they test real-value transactions. The rollout now positions Hong Kong to set an early benchmark for interoperable, bank-issued digital money across regional markets.