Authorities in Hong Kong and Shanghai have agreed to expand collaboration on blockchain applications aimed at improving trade finance and cargo documentation, according to a partnership unveiled Monday.
The Hong Kong Monetary Authority (HKMA), the Shanghai Data Bureau (SDB) and the National Technology Innovation Center for Blockchain (NTICBC) signed a memorandum of understanding to strengthen cooperation in digitizing trade and financing processes.
As part of the agreement, the organizations will jointly study the potential of building a blockchain-powered cross-border platform to connect trade data, electronic bills of lading and financial services. The initiative will operate under the HKMA’s Project Ensemble, launched in 2024 to explore tokenized financial infrastructure and new digital rails for the financial sector.
The initiative will leverage the HKMA’s blockchain-powered financial data platform, the Commercial Data Interchange (CDI), to advance trade finance by integrating cargo and trade information. Launched in 2022, the CDI was designed to give financial institutions streamlined access to corporate data, improving efficiency in lending processes.
The collaboration will also incorporate Project CargoX, another HKMA program built on the CDI, which focuses on enhancing the use of trade and cargo data to support financing and related services.
“Important milestone” for digital innovation
Howard Lee, deputy chief executive of the Hong Kong Monetary Authority, called the memorandum of understanding an “important milestone” in digital innovation cooperation between Hong Kong and Shanghai. He said the partnership aims to foster new digital use cases in cargo trade and finance while exploring infrastructure capable of connecting the two cities.
“We 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 […].”
Shao Jun, director of the Shanghai Data Bureau, said the agreement represents a meaningful advance in their goal of promoting “data-powered and innovation-driven development,” with an emphasis on building a secure, efficient and open digital infrastructure.
Separate push on digital asset policy
Alongside its blockchain trade initiatives, Hong Kong is also moving to enhance its tax framework to attract more investment funds and family offices by broadening the scope of eligible investments to include digital assets.
On Monday, Hui Ching-yyu, Hong Kong’s secretary for financial services and the treasury, outlined a proposal to introduce tax exemptions for overseas digital assets. Speaking at a Legislative Council Financial Affairs Committee meeting, he said the plan forms part of efforts to make the city’s tax concessions more competitive for funds and family offices.
The proposal would add digital assets to the list of qualifying investments under existing tax concession schemes. If approved, profits derived from digital assets held within these structures would be eligible for tax exemption.
