Hong Kong to use Chainlink protocol in CBDC pilot project

The study involving Chainlink's Cross-Chain Interoperability Protocol is one of many initiatives exploring use cases for a potential Hong Kong CBDC, or e-HKD.

The Hong Kong government is partnering with Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to test cross-border transactions between permissioned and permissionless blockchains, as well as settlements using different types of digital assets.

The partnership is part of Phase Two of Hong Kong’s central bank digital currency (CBDC) initiative. According to a report from payments company Visa, the initiative will involve a hypothetical Australian investor who wishes to purchase a tokenized asset in Hong Kong.

After requesting the purchase in a stablecoin pegged to Australia’s currency, the transaction will be routed via interactions across multiple blockchains. Finally, the purchased asset finds its way into the investor’s wallet, denominated in Hong Kong’s CBDC.

Chainlink’s CCIP plays a role in the communication between different blockchains. According to the company, CCIP is live on dozens of blockchains, including Ethereum Virtual Machine-compatible and Solana Virtual Machine-compatible blockchains. In the case of the Hong Kong study, the Ethereum testnet Sepolia will be used.

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