Supervisory Incubator for Distributed Ledger Technology (DLT)

On 8 January 2025, the Hong Kong Monetary Authority (HKMA) launched the Supervisory Incubator for Distributed Ledger Technology (DLT), a platform aimed at helping Authorized Institutions (AIs) harness the benefits of DLT while managing associated risks. The Incubator provides a one-stop supervisory platform offering AIs access to a dedicated team for feedback on DLT proposals and opportunities to conduct live trials to refine risk management practices through iterative approaches. To support these trials, the HKMA may offer supervisory flexibility, assessed case-by-case, contingent on AIs’ adherence to risk management principles aligned with those of the Fintech Supervisory Sandbox (FSS). The Incubator also addresses potential regulatory challenges posed by DLT adoption and may adapt regulations where necessary to align with the principle of “same activity, same risk, same regulation.” Over time, the HKMA plans to expand the Incubator’s scope through industry engagement, risk management guidance, and research initiatives. AIs interested in participating are encouraged to contact the HKMA for further details. Resources: https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2025/20250108e1.pdf