Regulators in Abu Dhabi and the Hong Kong Monetary Authority (HKMA) are planning on setting up a cross-border trade finance system that is built with distributed ledger technology (DLT).
The HKMA marked a fintech co-operation agreement on Tuesday with the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market, which oversees the financial market of the U.A.E’s. capital.
According to the HKMA, the firm will work hand in hand with the FSRA to create innovative financial technology projects, with interests on DLT usage in international trade finance.
“We are particularly pleased to start a dialogue with FSRA on the opportunity to build a cross-border trade finance network using distributed ledger technology.” Stated Nelson Chow, chief fintech officer of the HKMA.
Despite the fact that the HKMA has not offered points of interest on what platform the potential pilot might be based on, the underlying plan comes when the HKMA has just begun comparative works with its counterpart in Singapore.
The HKMA and the Monetary Authority of Singapore (MAS) have started testing a Hong Kong Trade Finance Platform (HKTFP), a HKMA-drove and DLT-based exchange fund verification of-idea since a year ago, cited Coindesk.
The report stated at the time that more than 20 worldwide banks and financial establishments joined the test with an end goal to advance the proof-of-concept, which was required to be ready by early 2019.