June Chen

The Hong Kong Monetary Authority has launched a supervisory incubator, which will foster the adoption of distributed ledger technology to augment risk management capabilities at both the individual bank and industry levels.

The incubator is a new supervisory arrangement designed to help banks maximize the potential benefits of distributed ledger technology or DLT adoption by effectively managing associated risks.

At the individual bank level, the incubator will offer a one-stop supervisory platform that enables banks to reaffirm the adequacy of their risk management controls prior to the full launch of a DLT-based initiative. Through the platform, banks will have access to a dedicated HKMA team for obtaining supervisory feedback and may opt to conduct live trials to validate and refine specific aspects of their risk management implementation under a hands-on and iterative approach.