Hong Kong and China Banks Test Blockchain Links for Credit Verification

The Hong Kong Financial Authority (HKMA) and the Folks’s Financial institution of China (PBoC) agreed to formalize the pilot challenge for cross-border credit score info sharing within the Better Bay Space.

The pilot challenge, which began in 2024, will strengthen knowledge connectivity between Hong Kong and mainland China within the Guangdong, Hong Kong and Macau area.

In response to CaixinHKMA Deputy Director Howard Lee confirmed that this system will transfer from pilot to official operation after profitable testing.

Seven retail banks, together with HSBC, Normal Chartered and Financial institution of China (Hong Kong), and three credit score reference companies are taking part.

The system now operates energetic blockchain nodes in each Hong Kong and Shenzhen, making a two-way bridge for verified credit score knowledge.

Associated: Hong Kong helps industrial banks’ tokenization initiatives in 2025 coverage speech

How the Blockchain Platform Verifies Credit Knowledge

The pilot contains the Shenzhen-Hong Kong Cross-Border Knowledge Verification Platform, a system that makes use of blockchain know-how to safe and validate the alternate of credit score knowledge. One blockchain node has been arrange in Hong Kong and one other in Shenzhen to facilitate encrypted knowledge transfers between licensed establishments.

The system permits people and corporations to acquire knowledge from registered suppliers and add it to the verification platform. An encryption algorithm then generates a 64-bit hash code that represents the info. The corresponding occasion throughout the border matches the code to verify authenticity, permitting reliable knowledge sharing and stopping tampering or unauthorized entry.

The construction of the platform ensures that privateness and knowledge safety necessities are met, whereas sustaining the integrity of monetary info. It additionally reduces reliance on guide verification, enabling sooner processing of credit score info between Hong Kong and Shenzhen.

Stablecoin licensing purposes make progress beneath new framework

As well as, the HKMA has reported progress on its new stablecoin regulatory framework, which got here into impact on August 1, 2025. By the tip of September, 36 firms had utilized for licenses after expressions of curiosity from 77 firms. The primary set of approvals is predicted to be obtained in early 2026.

Candidates embrace banks, securities companies, fee suppliers and e-commerce platforms. The framework mandates full Know Your Buyer (KYC) identification for all stablecoin transactions, consistent with Basel banking requirements to facilitate participation by monetary establishments.

Normal Chartered, a participant in Hong Kong’s stablecoin sandbox, confirmed plans to use for a license via a three way partnership with Anchorpoint Monetary, Hong Kong Telecom (HKT) and Animoca Manufacturers.

Associated: Hong Kong’s Stablecoin Regulation Will Develop into China’s Crypto Coverage Sandbox