Hong Kong Monetary Authority Launches DLT Regulatory Incubator

According to PANews, the Hong Kong Monetary Authority (HKMA) has introduced a Distributed Ledger Technology (DLT) Regulatory Incubator to assist banks in responsibly exploring the potential of DLT. The initiative aims to help banks fully leverage DLT while effectively managing associated risks. The incubator is designed to enhance risk management capabilities for individual banks and the banking sector as a whole, particularly when banks launch services involving both DLT and traditional banking infrastructure, such as deposits and loans. For individual banks, the incubator offers a one-stop regulatory platform to ensure comprehensive risk management measures are in place before fully implementing DLT projects. Banks can engage with a dedicated team from the HKMA for regulatory advice and opt for real-world testing to validate and refine risk management strategies in a practical and evolving manner. Additionally, the incubator will introduce a series of targeted measures to promote awareness and understanding of best practices in DLT risk management within the banking industry. These measures include regulatory guidelines, industry sharing sessions, and forward-looking research projects, which are expected to enhance the banking sector's ability to adopt DLT solutions in the long term.