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Hong Kong explores cross-border tokenisation with Brazil and Thailand - Industry roundup: 29 October

Hong Kong explores cross-border tokenisation with Brazil and Thailand

The Hong Kong Monetary Authority (HKMA) has announced two cross-border tokenisation initiatives, one with Thailand and another with Brazil. The collaboration with the Bank of Thailand (BOT) will explore cross-border tokenisation use cases under Project Ensemble and Project San.

The HKMA and the BOT began their fintech collaboration in 2019 with the signing of a Memorandum of Understanding (MoU) aimed at fostering financial innovation in both jurisdictions.  Since then, the pair have successfully collaborated on a number of ground-breaking projects, including Project Inthanon-LionRock and Project mBridge. Building upon these collaborations, the two central banks will explore Payment versus Payment (PvP) and Delivery versus Payment (DvP) tokenisation use cases, including trade payments and carbon credits. 

A key aspect of this collaboration will be a proof of concept development, exploring the interoperability of new distributed ledger technology integrated financial market infrastructures (DLT FMIs).  In the proof of concept development, the HKMA and the BOT will test a link between DLT FMIs under Project Ensemble and the BOT’s Project San.  

The Ensemble Sandbox, launched in August this year, serves as a testing ground for industry participants to conduct tokenisation experiments across four main areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance.

The BOT’s Project San, an internal initiative started in June 2024, aims to build and test a prototype for the tokenisation ecosystem.  This includes a wholesale settlement engine, EVM-compatible ledgers supporting tokenised private money and assets, and interoperability mechanisms.

The other initiative will see HKMA collaborating with the Banco Central do Brasil (BCB) to conduct cross-border tokenisation experiments under Project Ensemble and Drex pilot programme.  The two institutions will link their experimental central bank digital currency (CBDC) infrastructures, namely the Ensemble Sandbox and the Drex pilot platform, to explore cross-border payment-versus-payment (PvP) and delivery-versus-payment (DvP) settlement use cases in areas such as trade finance and carbon credits.

Building on the Co-operation Agreement signed by the HKMA and the BCB in 2018 to foster innovation in financial services across their respective markets, the collaboration follows the announcements by both parties of their latest rounds of experimentations involving CBDCs and tokenised assets.  The HKMA launched the Ensemble Sandbox in August this year to conduct experiments with industry participants across four main areas: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance.

Meanwhile, the BCB announced 13 themes for the second phase of its Drex pilot programme in September this year.  With the Brazilian CBDC, Drex, as the foundation, the Drex pilot aims to support the development of a tokenised financial market in Brazil.  The Drex platform is being developed in cooperation with more than 70 companies, bringing together a diverse set of financial market participants.

 

Citi launches digital trade receivable finance solution

Citi has launched Citi Digital Bill (CDB), an integrated digital bill discounting solution. CDB is designed to significantly reduce complexity by eliminating the need for physical documents and couriers and the movement of paper across multiple parties in different geographies. For sellers, CDB provides a fast, more transparent way to manage receivables, reducing the time for monetising receivables from a week to less than an hour.

The bank says this solution is an alternative to traditional paper-based bills of exchange (BoE) with an end-to-end digital platform, streamlining and digitising the flows within Citi’s proprietary receivables finance platform, CitiDirect. CDB enables parties to a digital bill (seller, buyer and Citi) to sign, accept, endorse and finance the digital bill in the platform, thereby removing historical challenges such as fragmented, manual processes, operational risks of collecting and safekeeping of paper documents, as well as delays in access to working capital. CDB is not a negotiable instrument and is structured under contract laws.

CDB enables buyers to gain visibility into the status of invoice approvals and access to digital bills at any time. This could lead to better tracking and management of transactions. It also connects buyers with key relationship banks efficiently, enhancing risk matching. 

CDB is currently available to Citi’s clients in the US, the UK, and Ireland, with plans to expand to additional countries in 2024, subject to necessary approvals.

“The launch of Citi Digital Bill is a significant advancement in trade finance, marking a groundbreaking shift away from longstanding paper and the wet ink-based practice of discounting bills,” said Sanjeev Ganjoo, Global Head of Trade Receivable Finance, at Citi Services. “Citi Digital Bill is a testimony to our digital-first approach to enhancing trade finance solutions. By effectively leveraging the power of technology, we continue to create substantial value for our clients through increased speed and transparency.”

 

HSBC unveils global virtual account solution for EUR and GBP e-commerce payments 

HSBC has introduced a cross-border virtual account solution for banks globally, allowing e-commerce merchant clients to receive payments in EUR and GBP through their local bank accounts.

Previously, businesses in certain regions could only access EUR and GBP funds via cross-border payments, which imposed higher costs on e-marketplace platforms and merchants due to additional fees and foreign exchange rates.

With the introduction of the virtual account, Chinese businesses trading on e-commerce platforms can now receive EUR and GBP payments through their local clearing system and into their own bank accounts without the need to establish foreign bank accounts in those regions.

The virtual account assigns each business a unique account number, enabling the domestic bank to identify the corresponding merchant for each transaction and to reconcile payments seamlessly, ensuring merchants get paid faster.

 

GTreasury recognised with ‘Best FX Tech Provider for Corporates’ award

GTreasury has been named the Best FX Tech Provider for Corporates in Euromoney’s 2024 Foreign Exchange Awards. The recognition underscores GTreasury’s commitment to innovation and excellence in providing cutting-edge foreign exchange solutions that address the complex and evolving needs of modern businesses.

“We’re proud that our best-in-class FX solution - built for the office of the CFO and corporate treasury teams - has earned this highly respected recognition from Euromoney,” said Ben Hipwell, group product manager, GTreasury. “Over the past year, we’ve seen a marked increase in customer demand for cutting-edge FX capabilities, and we’ve been able to meet those requirements head on and deliver customers significant financial benefits.”

GTreasury’s modular solution architecture allows companies to configure their FX risk management approach to their specific requirements, whether they are multinational corporations dealing with multiple currencies or growing businesses expanding into international markets.

The FX solution module enables customers to manage the full lifecycle of foreign currency exposures and derivatives from a single source of truth. This centralised approach simplifies data collection, improves visibility, and enhances decision-making processes. Leveraging machine learning algorithms, the platform provides sophisticated forecasting capabilities, helping treasury teams anticipate and prepare for potential currency fluctuations.

The solution generates ASC 815/IFRS 9-compliant documentation, runs effectiveness assessments, and prepares journal entries in both summary and detail formats. This automation can significantly reduce the time and effort required for regulatory compliance. GTreasury’s platform also integrates with leading market data providers, ensuring that treasury teams have access to timely currency rates and market insights. Users can create tailored reports and interactive dashboards, which allows for clear communication of FX positions and performance to stakeholders across the organisation.

 

Extend lets businesses streamline invoice payments using virtual cards

Extend, a virtual card and spend management platform, has announced the launch of Bill Pay, a feature that lets businesses streamline invoice payments using virtual cards. The feature is designed to simplify the workflow for accounts payable processes, optimise cash flow, maximise credit card rewards, and enhance security for organisations of all sizes.

Bill Pay lets Extend customers create and send a virtual card specifically for invoice payments through the Extend app. They can view all invoice payments and vendors in the new Bill Pay section of the platform, offering greater visibility into transactions. Customers can also pay multiple vendor invoices in bulk with virtual cards.

Vendors can receive a remittance email containing a secure link to the virtual card details and charge the virtual card for the amount of the invoice, like any other card transaction.

 

Erste Group goes live with Neterium’s transaction screening solution

One year after announcing a strategic partnership, Erste Group and Neterium have announced the implementation of Neterium’s transaction screening solution, which is now fully operational and serving over 16 million customers of Erste Bank across Central and Eastern Europe.

Following a one-year pilot phase, including testing, tuning, and a full-scale parallel run, Neterium’s screening system has been moved to production as of September 2024, completing the integration project between Erste Group and Neterium.

The partnership, originally announced on 19th of September 2023, aimed to support Erste Group’s compliance framework with a more efficient and scalable transaction screening solution. Over the course of the past year, Neterium's Jetflow solution has been rigorously tested and optimised to meet the demanding operational requirements of Erste Group’s seven core markets.

 

Nium debuts real-time account verification tool

Nium has launched Verify, a real-time bank account verification solution for businesses and individual accounts, available across 50 markets. Designed to support businesses with instant verification of beneficiary bank account details, the tool aims to reduce errors, operational inefficiencies, and compliance risks, increasing the confidence of the finality of real-time payments.

As companies expand internationally, the need for accurate and secure payment processing has become critical. Traditional methods of account verification are often time-consuming, error-prone, and susceptible to fraud. Nium Verify addresses these challenges by integrating directly with clearing systems and major banks within each country, providing instant confirmation of beneficiary account details before transactions are initiated. Additionally, Verify can be used to streamline onboarding for marketplaces, since the payment does not have to immediately follow the verification.

“Nium Verify comes at a critical time as businesses expand internationally and need to pay multiple beneficiaries across the globe,” said Alex Johnson, Chief Payments Officer at Nium. “With Nium Verify, we're providing a solution that not only enhances operational efficiency but also strengthens security and compliance for cross-border transactions. This helps businesses verify account details with confidence, eliminating costly misdirected payment, preventing fraud and improving customer experience.”

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