Chainlink powers $2 million CBDC-stablecoin swap pilot

The Hong Kong Monetary Authority (HKMA) has conducted a pilot program testing cross-border digital currency transactions using Chainlink’s (CRYPTO:LINK) blockchain protocol.

The Phase 2 e-HKD+ Pilot Programme involved Visa, Fidelity International, China AMC Hong Kong, and ANZ bank.

The test demonstrated the exchange between Hong Kong’s prototype central bank digital currency (e-HKD) and an Australian dollar stablecoin (A$DC).

Investors based in Australia were able to acquire Hong Kong money market fund units using either e-HKD or tokenised bank deposits.

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) facilitated the connection between ANZ’s private blockchain, DASchain, and the public Ethereum Sepolia testnet.

This setup enabled atomic settlement, meaning the simultaneous transfer of both the Australian stablecoin and the e-HKD, reducing counterparty risk.

The pilot evaluated Ethereum (CRYPTO:ETH) token standards ERC-20 and ERC-3643 for compatibility.

The e-HKD used the ERC-20 standard, while tokenised deposits employed ERC-3643, which includes regulatory compliance features such as identity verification.

The test also highlighted challenges in interoperability between public and permissioned blockchains.

Private blockchains are typically used by financial institutions for controlled operations, while public chains are necessary for wider asset distribution.

CCIP’s messaging protocol allowed cross-chain data transfer without requiring asset bridging.

Future testing phases will include end-to-end transactions like money market fund unit purchases.

The outcomes of these experiments aim to inform global standards for CBDCs, tokenised deposits, and settlement infrastructure.

Results from further phases are expected later in 2025.

At the time of reporting, the Chainlink (LINK) price was $14.47.