Hong Kong and mainland China have taken a major step toward strengthening financial cooperation through blockchain technology, following the announcement of a joint initiative to test cross-border credit verification systems. The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) have agreed to formalize the Greater Bay Area Cross-Border Credit Information Sharing pilot, a program designed to enhance the connectivity of financial data between Hong Kong and the Chinese mainland.
The pilot, which began in 2024, aims to facilitate seamless and secure sharing of verified credit information across the Guangdong-Hong Kong-Macao region. Local reports confirmed that the initiative will transition from a trial phase to full operation after a series of successful tests. Howard Lee, Deputy Chief Executive of the HKMA, reportedly stated that the program’s progress demonstrates the potential of blockchain in improving trust and efficiency in cross-border financial systems.
Blockchain-Driven Data Connectivity Between Hong Kong and Shenzhen
Under the new system, blockchain nodes have been deployed in both Hong Kong and Shenzhen to support two-way data exchanges between participating institutions. The pilot integrates the Shenzhen-Hong Kong Cross-Border Data Verification Platform, which employs blockchain technology to secure and validate credit data transmissions. This platform enables financial institutions to share encrypted information using advanced hashing techniques, ensuring that data remains tamper-proof and accessible only to authorized parties on both sides of the border.
Individuals and companies can obtain verified credit information from registered providers and upload it to the platform. Each dataset is processed through an encryption algorithm that generates a unique 64-bit hash code. The corresponding party across the border can then authenticate the information by matching the hash code, confirming the data’s legitimacy without direct exposure of sensitive information. This process reinforces data security and ensures compliance with regional privacy standards while significantly improving verification speed.
The system’s design emphasizes privacy, accuracy, and efficiency. In addition to automated encryption, manual verification steps have been incorporated to guarantee that only authorized participants can access matching data sets. The HKMA noted that this blockchain-based infrastructure enhances not only security but also the speed of credit-related information processing between Hong Kong and Shenzhen, making it a valuable model for future financial data exchanges.
Stablecoin Licensing Framework Gains Momentum
Alongside the blockchain pilot, the HKMA reported significant progress in its newly established stablecoin regulatory framework, which took effect on August 1, 2025. The authority revealed that more than 36 companies have formally applied for licenses, following expressions of interest from around 77 entities. The first batch of approvals is anticipated in early 2026. Applicants include major banks, securities firms, fintech startups, and e-commerce platforms aiming to operate within Hong Kong’s regulated digital asset ecosystem.
According to the HKMA, license applicants are required to comply with comprehensive Know Your Customer (KYC) guidelines and risk management standards, consistent with Basel banking norms. These measures are designed to ensure that financial institutions participating in stablecoin activities maintain transparency and accountability. Standard Chartered, which had already been part of Hong Kong’s stablecoin sandbox, is reportedly preparing a license application through a partnership with Hong Kong Telecom (HKT), Animoca Brands, and Anchorpoint Financial.
The HKMA has indicated that only a limited number of applicants will receive initial approvals, as the review process adheres to strict criteria under the Stablecoin Ordinance. Officials have reiterated that the licensing framework represents a significant milestone toward fostering responsible digital asset adoption while maintaining financial stability.
Mainland China Maintains Its Crypto Ban
Despite these advancements, mainland China continues to enforce its blanket ban on cryptocurrency activities introduced by the PBoC in September 2021. The prohibition rendered all digital asset transactions illegal, effectively ending the country’s previous dominance in crypto mining and exchange operations. Four years later, China’s financial authorities remain firm on the ban but have shown openness to controlled regional experiments, such as the cross-border blockchain initiatives with Hong Kong, which allow for innovation under close regulatory oversight.
The collaboration between Hong Kong and China through blockchain-based credit verification reflects a broader effort to balance technological innovation with regulatory prudence. As both jurisdictions pursue enhanced cross-border financial integration, the success of the Greater Bay Area pilot could serve as a model for future fintech cooperation across Asia.
