Hong Kong and Shanghai authorities have agreed to deepen cooperation on using blockchain technology to streamline trade finance and cargo documentation under a new partnership announced Monday.
Hong Kong Monetary Authority (HKMA), Shanghai Data Bureau (SDB) and National Technology Innovation Center for Blockchain (NTICBC) have signed a Memorandum of Understanding (MoU) to deepen cooperation in digitizing cargo trade and finance.
The parties will jointly research the benefits of developing a blockchain-based “cross-border platform” to connect commercial data, electronic bills of lading and financial applications under HKMA’s Project Ensemble, an initiative launched in 2024 to explore new digital rails for tokenized market infrastructure and financial services.
The project will use the HKMA’s blockchain-based financial data infrastructure, the Commercial Data Interchange, to explore trade finance using cargo and trade data. The HKMA launched the CDI in 2022 to enable institutional access to corporate data to facilitate credit.
The partners also plan to build on Project CargoX, an HKMA initiative built on CDI, to strengthen trade data capabilities for financing and related services.
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“Major Milestones” for Digital Innovation: HKMA
HKMA Deputy Chief Executive Howard Li 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 cargo trade and finance and explore infrastructure that can connect the two cities.
“We look forward to the innovative use of digital technology in areas such as cargo trade and finance, promoting joint achievements in digital innovation, exploring the digital infrastructure connecting Shanghai and Hong Kong, promoting the digitization of trade finance (…).”
SDB director Shao Jun said the partnership is an important step towards its commitment to promote “data-driven and innovation-driven development, striving to establish a secure, efficient, and open digital infrastructure.”
Separate emphasis on digital asset policy
In a separate policy track, Hong Kong is also taking steps to make its tax concessions more attractive to investment funds and family offices by expanding eligible investments to include digital assets.
On Monday, Hong Kong’s Secretary of Financial Services and Treasury, Hui Ching-yu, shared a proposal to introduce tax breaks for overseas digital assets, as part of a move to make Hong Kong’s tax breaks more attractive to investment funds and family offices.
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The proposals seek to include digital assets in qualifying investments for investment funds and family offices, the secretary said during Monday’s speech at a meeting of the Legislative Council’s financial affairs committee.
Subject to approval, the move will mean that profits from digital assets held under these structures will be eligible for tax exemption.
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