Hong Kong Explores Cross-Border Digital Payments With Chainlink
Hong Kong is pushing forward with trials of its central bank digital currency (CBDC), the e-HKD, and has now turned to blockchain infrastructure provider Chainlink to help test international transactions. The focus of this latest pilot is to find out how digital assets can move between different blockchain networks, especially those that follow different rules or access models.
Image 1 (Source: CoinBureau)
Connecting Digital Currencies Across Borders
This new stage in the e-HKD project involves a collaboration between the Hong Kong Monetary Authority (HKMA), Chainlink, and several major financial institutions. At the centre of the trial is Chainlink’s Cross-Chain Interoperability Protocol (CCIP)—a system that allows information and digital assets to pass securely between blockchains that normally don’t connect.
The practical example being tested involves a fictional Australian investor wanting to buy a digital asset based in Hong Kong. Instead of using regular international transfers, the investor starts the process using a stablecoin tied to the Australian dollar. This payment travels through a series of digital networks before being exchanged into e-HKD, Hong Kong’s CBDC, and the asset is delivered into the investor’s wallet.
Chainlink’s CCIP manages the process of moving between the different blockchain systems. In this trial, the Ethereum Sepolia testnet is being used to simulate the transactions. CCIP acts as a kind of translator or connector between networks, making sure everything moves smoothly despite differences in how those systems operate.
Backed by Major Industry Players
This pilot is part of Phase Two of the e-HKD programme, which began in September 2024. The HKMA selected 11 groups of companies to explore different ways CBDC could be used in practice.
In this particular use case, several high-profile financial organisations are involved. Visa is supporting the technological side of the project. Australia and New Zealand Banking Group (ANZ) is providing the Australian dollar-backed stablecoin used in the trial. On the investment side, Fidelity International and ChinaAMC, both global asset managers, are also contributing to the test framework.
The goal is to see how well these different organisations can work together across new digital platforms, and whether transactions involving government-issued digital money can be completed efficiently and securely across borders.
Testing Blockchains With Different Access Levels
An important aspect of the pilot is the interaction between permissioned and permissionless blockchains. A permissioned blockchain is restricted to approved users and is generally controlled by an organisation. This setup helps with privacy, regulation, and identity checks. A permissionless blockchain, on the other hand, is open to anyone, with no central authority. It offers wider reach and operates in a more decentralised way.
This test is designed to understand how these two types of systems can cooperate. The use of Chainlink’s CCIP shows how technology can bridge gaps between these very different blockchain environments. The protocol ensures messages and digital assets can move safely and reliably, even when the rules and structures of the underlying systems are not the same.
By running these tests in a controlled environment, the HKMA and its partners are assessing how future digital financial systems might work across borders, using both government and private-sector digital tools.
Image 2 (Source: Unsplash)
Looking Ahead to the Future of e-HKD
The e-HKD pilot programme continues to explore several possible applications for a digital Hong Kong dollar. The findings from all test groups are expected to be released by the end of 2025.
Although this stage focuses on just one type of transaction, it plays a key role in shaping the larger vision of a modern digital financial network. It shows how existing financial institutions, like Visa and ANZ, are beginning to work more closely with blockchain innovators such as Chainlink. This cooperation between traditional finance and emerging technology could help set the stage for more flexible and efficient international payments.
Read Also: Hong Kong Rolls Out Licensing Laws for Stablecoin Issuers to Lead in Digital Finance
If this and other trials go well, Hong Kong’s e-HKD could become a practical tool for digital commerce, providing a more streamlined way for people and businesses to move value across borders without relying solely on the current banking system.
