The Hong Kong government is working with Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to experiment with cross-border transactions that connect permissioned and permissionless blockchains, along with settlements involving various types of digital assets.

This collaboration is part of the second phase of Hong Kong’s central bank digital currency (CBDC) project.

A report by Visa outlines a scenario involving an Australian investor aiming to buy a tokenized asset in Hong Kong.

The investor initiates the purchase using a stablecoin pegged to the Australian dollar.

The transaction then moves across multiple blockchains and ultimately ends with the asset being delivered to the investor’s wallet, denominated in Hong Kong’s CBDC.

Chainlink’s CCIP facilitates communication across different blockchains. The protocol is already operating on numerous blockchains, including those compatible with Ethereum and Solana virtual machines.

For this particular project, the Ethereum testnet Sepolia will be used. Key collaborators include Visa as the technology provider, ANZ Bank, and asset managers ChinaAMC and Fidelity International.

This study is one of several commissioned by the Hong Kong government to examine possible applications for a future CBDC.

The study highlights the interaction between permissioned and permissionless blockchains. Permissioned systems offer more privacy and regulatory control, while permissionless networks are decentralized and open, making them ideal for broad distribution.

The Hong Kong Monetary Authority (HKMA) launched Phase Two of the CBDC initiative on September 23, 2024, involving 11 corporate groups exploring various use cases for the e-HKD. Results are expected by the end of 2025.

Meanwhile, global enthusiasm for CBDCs may be slowing. A February 2025 survey showed that only 18% of central banks are inclined to issue a CBDC, down from 38% in 2022.

Nevertheless, some regions are continuing development, with Israel releasing an early blueprint for a digital shekel in March, and the European Union advancing its own CBDC infrastructure in February.

Sources:

https://cointelegraph.com/news/hong-kong-government-chainlink-ccip-cbdc-pilot-project

https://www.visa.com.sg/content/dam/VCOM/regional/ap/singapore/global-elements/documents/interim-report-e-hkd-pilot-programme-phase-2.pdf

https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/09/20240923-3/