Hong Kong and Shanghai authorities have agreed to deepen cooperation on using blockchain technology to streamline trade finance and cargo documentation, under a new partnership announced Monday.
The Hong Kong Monetary Authority (HKMA), the Shanghai Data Bureau (SDB) and the National Technology Innovation Center for Blockchain (NTICBC) have signed a memorandum of understanding (MoU) to deepen collaboration in digitizing cargo trade and finance, according to the announcement.
The parties will conduct joint research on the benefits of developing a blockchain-based โcross-border platformโ for interlinking trade data, electronic bill of lading and financial applications under the HKMAโs Project Ensemble, an initiative launched in 2024 to explore tokenized market infrastructure and new digital rails for financial services.
The project will use the HKMAโs blockchain-based financial data infrastructure, the Commercial Data Interchange, to explore trade finance through cargo and trade data. The HKMA launched the CDI in 2022 to enable institutional access to corporate data to streamline lending.
The partners also plan to draw on Project CargoX, an HKMA initiative built on the CDI that aims to strengthen trade and cargo data capabilities for financing and related services.
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โImportant milestoneโ for digital innovation: HKMA
Howard Lee, deputy chief executive of the HKMA, described the MoU as an โimportant milestoneโ for digital innovation cooperation between Hong Kong and Shanghai. He said the agencies aim to promote new digital applications in cargo trade and finance and explore infrastructure that can link the two cities.
โWe look forward to driving innovative application of digital technology in areas such as cargo trade and finance, promoting joint achievements in digital innovation, exploring a digital infrastructure that links Shanghai and Hong Kong, promoting digitalisation of trade finance […].โ
The director of SDB, Shao Jun, said that the partnership marks a significant step towards their commitment to foster โdata-powered and innovation-driven development, striving to establish a secure, efficient, and open digital infrastructure.โ
Separate push on digital asset policy
In a separate policy track, Hong Kong is also taking steps to make its tax concessions more attractive to investment funds and family offices by expanding qualifying investments to include digital assets.
On Monday, Hui Ching-yu, Hong Kongโs secretary of financial services and the treasury, shared a proposal to introduce tax exemptions for overseas digital assets, as part of an initiative to make Hong Kongโs tax concessions more attractive to investment funds and family offices.
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The proposals seek to add digital assets to the qualifying investments for investment funds and family offices, said the secretary during a Monday speech at a Legislative Council Financial Affairs Committee meeting.
Subject to approval, the pleasure would mean that the profits from digital assets held under these structures would qualify for tax exemption.
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