Hong Kong and Shanghai authorities have agreed to deepen cooperation in using blockchain technology to streamline trade finance and cargo documentation.
According to the announcement, the Hong Kong Monetary Authority (HKMA), the Shanghai Data Bureau (SDB) and the National Innovative Blockchain Technology Center (NTICBC) have signed a memorandum of understanding (MoU) to deepen cooperation in the field of digitization of freight trade and finance.
The parties are conducting joint research on the benefits of developing a blockchain-based “cross-border platform” to connect trade data, electronic bills of lading and financial applications under the HKMA Project Ensemble, an initiative launched in 2024 to explore tokenized market infrastructure and new digital rails for financial services.
The project will use the HKMA’s blockchain-based financial data infrastructure, trading data exchange, to explore trade finance through freight and trade data. The HKMA launched the CDI in 2022 to provide institutional access to corporate data to streamline lending.
The partners also plan to take advantage of Project CargoX, an HKMA initiative built on CDI, aimed at strengthening business capacity and freight information for financing and related services.
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‘Milestone’ for digital innovation: HKMA
Howard Lee, HKMA’s deputy chief executive, described the MoU as a “significant milestone” for digital innovation cooperation between Hong Kong and Shanghai. He said the agencies aim to promote new digital applications in freight and finance and explore infrastructure that can link the two cities.
“We look forward to the innovative application of digital technologies in areas such as freight trade and finance, promoting joint achievements in digital innovation, exploring the digital infrastructure that connects Shanghai and Hong Kong, helping to digitize trade finance (…).”
SDB CEO Shao Jun said the partnership is an important step towards their commitment to promote “data- and innovation-driven development, striving to create a secure, efficient and open digital infrastructure”.
A separate submission to the digital asset policy
In a separate policy move, Hong Kong is also taking steps to make its tax incentives for investment funds and family offices more attractive by expanding eligible investments to include digital assets.
On Monday, Hui Ching-yu, Hong Kong’s financial services and treasury secretary, shared a proposal to introduce tax breaks for overseas digital assets as part of an initiative to make Hong Kong’s tax breaks more attractive to investment funds and family offices.
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The proposals seek to add digital assets to eligible investments for mutual funds and family offices, the secretary said during a Monday meeting of the Legislative Council’s Financial Affairs Committee.
If approved, the approval would mean that profits from digital assets held under these structures would qualify for tax exemption.
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