HSBC and Ant unlock 24/7 cross-border payments with blockchain

HSBC and Ant International have successfully completed a series of HKD-denominated blockchain-based transactions under Project Ensemble, the HKMA’s pioneering sandbox initiative aimed at advancing wholesale central bank digital currency (wCBDC) adoption.

The two organisations achieved the first HKD cross-bank test transactions through Ensemble’s Liquidity Management sandbox, underscoring the potential of blockchain to transform cross-border payment and liquidity management.

Initiated in March, Project Ensemble provides a sandbox environment where companies can test and develop tokenization solutions.

HSBC and Ant International utilised this platform to explore high-efficiency, blockchain-based transactions, which integrate HSBC’s and Hang Seng Bank’s networks with Ant International’s Whale platform. This integration facilitated real-time, cross-bank tokenized deposit transfers available 24/7, an offering that could reshape the treasury management landscape by reducing costs and enhancing working capital efficiencies.

Expanding tokenization’s scope in corporate treasury

As cross-border digital transactions increase, the need for seamless, round-the-clock fund transfers has become critical for multinational corporations. HSBC and Ant International’s blockchain venture illustrates the potential of tokenized deposits to support this demand.

According to Vincent Lau, HSBC’s Global Head of Digital Money, the latest test case “demonstrates the potential of tokenised deposits in facilitating real-time cross-bank corporate treasury management through the Ensemble interoperability platform.”

This marks HSBC’s fourth proof-of-concept (PoC) within the Ensemble Sandbox, following successful PoCs in interbank payment settlement, tokenized bond settlement, and tokenized electronic bill of lading settlement.

Ant International’s Whale platform, a blockchain-driven treasury management tool, played a central role in these trials, employing advanced encryption and artificial intelligence to enable real-time fund movements with heightened transparency.

Kelvin Li, Head of Platform Tech at Ant International, expressed optimism about the collaboration’s future, stating, “Together with leading banks such as HSBC, we will continue to expand the scalable adoption of our Whale platform… so we can better support businesses’ cross-border and global treasury needs.”

Blockchain’s next wave in financial innovation

Project Ensemble’s sandbox has enabled HSBC to further its digital money capabilities while aligning with Hong Kong’s broader ambition to become a hub for blockchain and wCBDC innovations. This collaboration is not HSBC’s first foray into tokenization; earlier in 2023, HSBC tested tokenized deposits within its network, enabling real-time treasury fund movement between corporate accounts.

In February, HSBC also launched the Orion platform for multi-currency digital bond issuance, establishing itself as a leader in digital asset adoption.

With global banks increasingly looking to blockchain for solutions to liquidity and payment challenges, Project Ensemble’s progress could serve as a blueprint for international applications. For Hong Kong, fostering tokenization and blockchain technology could bolster its position as a digital finance leader, particularly amid growing global interest in central bank digital currencies.

The results of HSBC and Ant International’s blockchain-based tests highlight blockchain’s transformative potential in corporate treasury management. As the partnership develops, both companies are expected to introduce further use cases under Project Ensemble, ultimately pushing forward the practical applications of blockchain in global finance.

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