Chainlink Powers CBDC Exchange in Hong Kong, Australia

Chainlink is playing an advanced role in Hong Kong’s push for cross-border payment functionality for its central bank digital currency (CBDC) experiments. Leaning on Chainlink’s infrastructure, participants in the pilot will attempt to move tokenized funds between Australia and Hong Kong.

Chainlink Powers Cross-Border Fund Transfers

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has been tapped to support the exchange of tokenized funds across national borders. According to a post on X by Chainlink, its CCIP will be used in a pilot program to securely exchange Hong Kong’s CBDC and an Australian dollar stablecoin.

The pilot project forms part of phase two of the Hong Kong CBDC project, e-HKD, with authorities keen on pushing the frontiers for cross-border functionalities. The pilot will attempt to swap e-HKD for A$DC, an Australian stablecoin, using blockchain technology for real-time settlement.

The initiative involves payment processor Visa and A$DC issuer ANZ, with Fidelity International and ChinaAMC serving as asset managers. In addition to CCIP, Chainlink confirmed that the use case also relies on its Digital Transfer Agent (DTA) solutions to enable multichain fund operations.

A closer look at Chainlink’s involvement reveals that CCIP will facilitate the Payment-versus-Payment (PvP) mechanism for digital currency swaps. Additionally, execution will be handled through the DTA model, ensuring compliance across multiple jurisdictions and token standards.

Cross-border transactions are gaining momentum, with companies like Apple, X, Airbnb, and Google exploring stablecoins for cross-border transactions.

LINK Price Reacts Amid Project Expansion Plans

According to the blog post, Chainlink intends to broaden its involvement in the CBDC initiative. To begin with, participants will work to extend the PvP workflow across the entire transaction lifecycle, with Chainlink playing a central role.

Expanding PvP across the full lifecycle offers several benefits, including the potential for 24/7 on-chain markets. Moreover, the blockchain-based environment will preserve user privacy while mitigating counterparty risks.

LINK price has rallied by nearly 2% following the buzz from the pilot project. LINK currently trades at $14.06, matching the broader enthusiasm of the cryptocurrency markets.

Crypto prices are rallying amid growing speculation that Bitcoin’s price will reach $110K before the end of the week.

In May, World Liberty Financial tapped Chainlink to enable cross-chain stablecoin transfers for USD1, further demonstrating Chainlink’s growing capabilities.

✓ Share:

Aliyu Pokima

Aliyu Pokima is a seasoned cryptocurrency and emerging technologies journalist with a knack for covering needle-moving stories in the space. Aliyu delivers breaking news stories, regulatory updates, and insightful analysis with depth and precision. When he’s not poring over charts or following leads, Aliyu enjoys playing the bass guitar, lifting weights and running marathons.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.