HKMA announces four fintech measures covering AI agents and cross-border payments, among others.

The Hong Kong FinTech Week opened today, with HKMA Chief Executive Eddie Yue announcing four key fintech developments and new measures, including the launch of "Project Sage" to explore agentic finance; a collaboration with the Hong Kong University of Science and Technology to launch a post-quantum cryptography toolkit; expansion of tokenization applications; and enhancement of cross-border payment convenience via the Faster Payment System. Regarding Project Sage, a cross-sector expert group covering finance, payments, professional services, technology and academia will be established to study testing more AI agent application scenarios in controlled environments such as sandboxes, and to explore interoperability standards between different AI agents. The HKMA also published a discussion paper the same day to consult the industry on governance models for banks' use of agentic AI, liability arrangements, whether to establish a central registry of trusted AI agents, and the formulation of "Know Your Agent" standards, with the goal of establishing regulatory "guardrails" that allow the industry to exercise creativity under controllable risks. In addressing quantum computing risks, the HKMA will join hands with HKUST to launch a post-quantum cryptography (PQC) toolkit to help Hong Kong banks cope with the risk that quantum computing could rapidly break existing cryptographic systems in the future, covering governance arrangements for PQC transition, risk assessment, implementation plans, and methods to achieve "crypto-agility," enabling banks to begin transition preparations as early as possible. Eddie Yue said quantum computing may not be far off, banks need several years to prepare, and they should enhance the flexibility of their cryptographic systems early. Eddie Yue continued that the Ensemble sandbox project will introduce tokenized central bank money to enable 7x24 real-value transaction settlement of interbank tokenized deposits, and will increase the number of banks participating in tokenized deposits, allowing corporates to make interbank and even cross-border payments at any time, and retail investors to invest in tokenized financial products more flexibly. The HKMA will also expand the tokenization trial in the secondary market of Exchange Fund Bills, explore the inclusion of regulated stablecoins as a payment channel, and jointly launch the "T-Connect Launchpad" collaboration platform with Cyberport, open for applications from fintech companies and digital asset companies. In addition, to enhance cross-border payment convenience, the Faster Payment System will connect with UnionPay International within this year, gradually supporting more than 100 million UnionPay and network partner merchants across more than 40 markets worldwide, facilitating local and cross-border retail payments for the public. Eddie Yue emphasized that the four measures are interconnected, and fintech development must strike a balance between active innovation and risk management, so that innovation can go further and be implemented more solidly, benefiting more people.