Zhu Haokang from Huaxia Fund: How can Digital Hong Kong Dollar+ help Hong Kong consolidate its global digital finance leadership?

On June 9, 2025, Huaxia Fund (Hong Kong), Visa, Australia and New Zealand Banking Group ( known as "ANZ" ), and Fidelity International jointly released the interim report of the second phase of the Hong Kong Monetary Authority (HKMA) e-HKD+ pilot program, titled "Transforming Global Payments: The Role of Tokenized Currency and Funds in Cross-Border Transactions." This sandbox aims to explore how tokenization technology can drive the development of next-generation cutting-edge payment infrastructure, including understanding the role of tokenization in facilitating transactions while ensuring financial stability and compliance.

Zhu Haokang, the head of digital asset management and family wealth management at Hua Xia Fund (Hong Kong), shared: "Hua Xia Fund has always been at the forefront of innovation in the asset management industry. Through the Digital Hong Kong Dollar + Pilot Program Phase Two, we partnered with ANZ Bank and Visa to use tokenized bank deposits to purchase the tokenized funds issued by Hua Xia (Hong Kong). This program demonstrates how new digital currencies can enhance the efficiency and transparency of fund unit issuance and circulation. This sandbox is not only an important milestone in our digital asset strategy but also a key step in shaping the future of fund management."

China Asset Management (Hong Kong) believes that retail Central Bank Digital Currencies (CBDC) have the potential to simplify subscription, redemption, and settlement processes, while also enhancing operational efficiency and market transparency. China Asset Management (Hong Kong) will continue to promote the application of new digital currencies in fund management, tokenization of assets, and cross-border transactions, thereby further consolidating Hong Kong's position as a global leader in digital finance.

Since 2017, the Hong Kong Monetary Authority has led several explorations of new types of digital currencies in a sandbox, including Central Bank Digital Currency (CBDC) and tokenized deposits. These explorations aimed at cutting-edge payment infrastructure are intended to solidify Hong Kong's leading position as an efficient trading environment. In November 2022, with the launch of the first phase of the Digital Hong Kong Dollar pilot program, the HKMA made significant strides in testing the innovative applications of the hypothetical Digital Hong Kong Dollar and its potential to become a future payment means for Hong Kong residents and businesses.

In September 2024, the "Digital Hong Kong Dollar Project" was renamed to "Digital Hong Kong Dollar+ Project", expanding its scope from the Digital Hong Kong Dollar to new areas including tokenized deposits, and launched the second phase of the Digital Hong Kong Dollar Pilot Scheme to demonstrate its commitment to exploring more transformative applications of digital currency. The second phase revolves around three themes for use case exploration: settlement of tokenized assets, programmability, and offline payments. Huaxia Fund (Hong Kong), Visa, ANZ Bank, and Fidelity International are among the 11 alliances participating in the sandbox, focusing on programmability and the settlement of tokenized assets. This use case explores the cross-border transactions between the new digital currency and tokenized money market funds (MMF). Sandbox participants will test how Australian investors can use Digital Hong Kong Dollar or tokenized deposits to purchase tokenized fund units from Hong Kong asset management companies. The whole process is divided into two steps: first, Australian investors acquire Digital Hong Kong Dollar through ANZ Bank; second, they use Digital Hong Kong Dollar to purchase shares of the tokenized Hong Kong Money Market Fund from Huaxia Fund (Hong Kong). These transactions are designed to be close to real-time and synchronized to test the effect of reducing counterparty risk associated with settlement.

In the next phase of the sandbox, sandbox participants will initiate end-to-end trading tests to delve into how tokenization technology can reduce counterparty risk associated with settlement. These tests are expected to provide important insights for the industry's further development in terms of interoperability standards, token standards, token distribution, and the 24/7 availability provided by blockchain technology. Sandbox participants look forward to this sandbox helping to fully explore the potential of the digital Hong Kong dollar in Hong Kong and contributing to shaping global digital asset industry standards.