Mastercard, Standard Chartered, Mox and Libeara successfully complete a proof-of-concept pilot on tokenized deposits and tokenized carbon credits through regulatory sandbox

Standard Chartered Bank (Hong Kong) Limited (“SCBHK”) has partnered with Mox Bank Limited (“Mox”), Mastercard and Libeara on a proof-of-concept (“POC”) pilot exploring the operational and risk management benefits of tokenized deposits to support the settlement of tokenized assets. Completed under the Hong Kong Monetary Authority (“HKMA”)’s Fintech Supervisory Sandbox, the POC is the latest milestone in driving fintech innovation and developing the tokenization market in Hong Kong.

As the first live test of the Mastercard Multi-Token Network (“MTN”), the POC used the following test scenario to explore how this could work in the context of carbon credits:

1. A Mox client wants to buy a carbon credit to offset his/her personal carbon usage and deposits the funds for this in his/her Mox bank account.

2. Mox requests SCBHK tokenize the desired carbon credit using Libeara, a tokenization platform incubated by SC Ventures.^[1]

3. Through the Mastercard MTN, the client’s deposit is also tokenized and an atomic swap^[2] is initiated between the two tokenized instruments.  

4. The result is a transparent, real-time transaction between SCBHK and Mox, with the end client receiving access to a tokenized version of their carbon credit. This can be held in a digital wallet, or in this scenario, used to offset his/her carbon footprint.

Mary Huen, Chief Executive Officer, Hong Kong, Standard Chartered, said, “The tokenization of real-world assets and the potential use of different forms of tokenized currency is integral to the future of the financial industry. SCBHK is keen to stay at the forefront of tokenization and drive fintech development in Hong Kong. Under the guidance of the HKMA, we are proud to pioneer this project with our virtual bank Mox, incubated venture Libeara, and longtime partner Mastercard, with the objective of catalyzing the adoption of tokenization in financial assets. This POC developed around tokenized carbon credits and tokenized deposits is a testament to how SCBHK supports sustainable finance innovation in Hong Kong’s digital economy.”

Helena Chen, managing director, Hong Kong & Macau, Mastercard said: “To unlock the full potential of blockchain technology, continuous collaboration, testing, exploration, and development of innovative use cases are needed to bring real value to businesses and interoperability across the industry. Using the Mastercard MTN, Mastercard is energized to partner with industry-leading players like SCBHK, Mox and Libeara to develop real-world applications that reshape how consumers and businesses connect, interact, and transact. As the Hong Kong Monetary Authority (HKMA) further develops Hong Kong as a leading digital assets hub, Mastercard is fully committed to supporting its efforts to drive fintech innovation and the advancement of the tokenization market in Hong Kong.”

Utilizing Standard Chartered’s extensive global network and the strong collaboration between its various business arms, this POC demonstrates the Bank’s strategic approach to pool the collective expertise from its partners and drive innovative digital finance solutions. SCBHK supports the development of digital assets in Hong Kong through a variety of key projects, including Project mBridge, Project Ensemble, and the HKMA’s e-HKD Pilot Program. Together with its partners, SCBHK continues to explore the possibilities of digital asset-related technologies and contribute to Hong Kong’s development as a digital asset hub. Most recently, Libeara has extended its footprint to Hong Kong to better support tokenization projects in the region.   

Mastercard has a wider commitment to helping people, businesses and governments better understand and trust how blockchain technology can be used to address pain points and build more efficient systems. This includes working with a range of partners in Hong Kong and around the world to deploy innovative technologies to benefit businesses that are looking to exchange value safely and securely.

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^[1] Libeara is an asset tokenization technology service provider that was incubated by SC Ventures, the innovation, fintech investment and ventures arm of the Standard Chartered Group.

^[2] An atomic swap is when two entities trade tokenized assets across different blockchain networks.