The Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) jointly launched a cross-border stablecoin clearing trial, marking a substantial step forward in Asia's digital financial connectivity.

I. Introduction: Asian Fintech Ushers in a New Chapter of Cross-Border Collaboration

In late October 2025, the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) jointly announced the official launch of the **"Cross-border Stablecoin Clearing and Interoperability Pilot Project" (Project Evergreen).
The plan aims to achieve mutual recognition and instant settlement of digital currencies under the regulatory frameworks of the two regions through blockchain technology, marking a substantial step forward in the construction of Asia's digital financial infrastructure.

Officials from both sides stated at a joint press conference that the project will "provide a low-cost, highly transparent digital solution for cross-border capital flows within the Asia-Pacific region," and plans to complete the test results report in the first quarter of 2026.
This is another cross-border digital finance experiment jointly led by Asia's two major international financial centers, following the "mBridge" project between China and Hong Kong.

II. Project Overview: Technical Blueprint for Stablecoin Liquidation

This cross-border clearing trial is designed around the core concept of "stablecoin interoperability," aiming to achieve clearing interoperability between digital currencies recognized by regulators in different regions , while ensuring consistency between anti-money laundering (AML) and customer identification (KYC) standards.

The experiment is divided into a three-layer technical architecture:

1. Settlement Layer
   It employs a permissioned blockchain system, with nodes jointly managed by the Hong Kong Monetary Authority and the Monetary Authority of Singapore. Transaction verification utilizes a "multi-party verification consensus mechanism," enabling cross-border clearing to be completed within 3 seconds.

2. Compliance Layer
   The system features a built-in regulatory interface, allowing regulatory bodies in two locations to audit transaction records in real time without directly accessing users' private data. Zero-knowledge proof technology is used to ensure a balance between privacy and transparency.

3. Interoperability Layer
   It is compatible with mainstream stablecoins and central bank digital currencies, including the digital yuan (e-CNY), the Singapore test version of CBDC (Project Orchid), and commercial stablecoins such as USDT and USDC.

The goal of this design is to establish a **“verifiable digital currency bridge across regulatory systems”**, serving as a foundational protocol template for clearing in the Asian region.

III. Policy Motivation: Financial Competition and Regional Collaboration in Parallel

In recent years, the global stablecoin market has exceeded $1.5 trillion, with cross-border payments becoming its most promising application scenario.
As a core region for global trade, Asia experiences frequent cross-border fund settlements. However, the traditional SWIFT system is characterized by high transaction fees and long settlement times.
Taking Hong Kong and Singapore as an example, bilateral trade exceeds US$70 billion, but cross-border settlement takes an average of 1-2 working days to complete.

The fundamental purpose of HKMA and MAS in promoting this trial is:

• Reduce cross-border payment costs : Settlement fees are expected to decrease by 70%.

• Enhance regional financial independence : reduce reliance on the US dollar settlement network.

• Promoting convergence of regulatory standards : Establishing an Asian version of digital currency regulatory guidelines.

Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, said the project is not only a technological collaboration, but also an "institutional innovation for regulatory trust."
Ravi Menon, Managing Director of the Monetary Authority of Singapore, emphasized that the plan would help "drive digital currencies in Asia into a safe and compliant phase of cross-border use."

IV. Technology Participants: A Model of Public-Private Collaboration

This pilot program involved multiple organizations:

• Technology-driven :
  The Hong Kong University of Science and Technology Blockchain Lab, the National University of Singapore Fintech Institute, and several fintech companies such as HashKey, R3, and Temasek Blockchain.

• Banks and payment institutions :
  Standard Chartered Bank, DBS Bank, HSBC, Hang Seng Bank, Alipay Hong Kong, and GrabPay were all invited to participate in the test transactions.

• Regulatory observers :
  This includes the Bank of Thailand, the Central Bank of the United Arab Emirates, and the BIS Innovation Hub observer group.

This diversified display project has an international perspective and lays the foundation for future cooperation in ASEAN and the Guangdong-Hong Kong-Macao Greater Bay Area.

V. Operating Mechanism: Dual-Currency Stable Liquidation Model

The core innovation of this experiment lies in proposing the " Dual-Stable Settlement Model ".
Specifically:
When a Hong Kong company pays a Singaporean recipient in Hong Kong Dollar Stablecoins (HKD-S), the system will simultaneously generate a mapping in Singapore Dollar Stablecoins (SGD-S) and complete a 1:1 exchange.
Clearing is automatically matched by a central regulatory node to ensure that fund flows are consistent with regulatory records.

This model has the following advantages:

• Avoid exchange rate slippage in traditional cross-currency clearing;

• Provides auditable, real-time circulation data;

• It supports 24/7 operation and is not restricted by bank business hours.

MAS disclosed that in the first round of testing, the average completion time for cross-border payments was only 2.8 seconds, and the total transaction cost was reduced by about 82% compared to the traditional SWIFT.

VI. Regulatory Design: Innovation within a Compliance Framework

The cooperation agreement between the two regulatory authorities clearly states:
All participating institutions must obtain local financial license approval and comply with uniform anti-money laundering and customer identification requirements.
In addition, the regulatory system will be equipped with a **"real-time risk scoring engine"**, which uses AI algorithms to analyze abnormal transaction patterns. Once a high-risk path is detected, the system will automatically freeze and liquidate the transaction and initiate a second-level manual review.

This design is considered a groundbreaking attempt at regulatory compliance for digital currencies.
A senior Hong Kong Monetary Authority official pointed out: "The development of digital finance must innovate within a controllable scope, and the key to stablecoin clearing is the parallel design of regulation and technology."

VII. Potential Impact: Reshaping the Asian Digital Currency Landscape

The project's impact extends far beyond the two regions, potentially reshaping Asia's digital finance ecosystem over the next three to five years.

1. Regional clearing network integration
   If the pilot program is successful, it will be expanded to other ASEAN member states in the future to achieve multi-currency mutual recognition and clearing.

2. The legalization of stablecoins is accelerating . Hong Kong and Singapore may be the first to establish a stablecoin licensing system, providing a legal basis for corporate stablecoins and bank-issued tokenized deposits.

3. Facilitating cross-border capital flows : Enterprises can use regulated stablecoins to complete trade settlements across different jurisdictions, greatly reducing international transaction costs for SMEs.

4. Promoting the de-dollarization of Asian finance
   If stablecoin settlements are based on regional currencies, it will weaken the dollar's dominance in Asian trade settlements.

VIII. Risks and Controversies: Balancing Privacy and Monetary Policy

Despite the optimistic outlook, the project still faces several risks:

• Regulatory differences : There are still slight differences between Hong Kong and Singapore in data privacy and anti-money laundering standards, and unifying the regulatory language remains a challenge.

• Monetary policy risk : The cross-border circulation of stablecoins may weaken the central bank's control over the liquidity of the domestic currency.

• System security : Although the blockchain consensus mechanism is secure, node attacks or smart contract vulnerabilities remain potential threats.

• Public trust issues : Ordinary users still need market education to understand the acceptance level of "government-backed stablecoins".

A MAS technical advisor stated, "Our goal is to find a 'dynamic balance' between privacy, transparency, and regulatory control."

IX. Market Reaction: Fintech stocks led the gains, and stablecoin projects were in high demand.

The announcement was met with a positive response from the fintech sectors in Singapore and Hong Kong.
On the Hong Kong Stock Exchange, shares of blockchain infrastructure company BC Group rose 6.2% that day.
Shares of financial cloud company Silvergate Asia rose 5.7% on the Singapore Exchange.

Analysts believe that such regulatory-driven projects will create broad application scenarios for compliant stablecoins and attract more traditional banks to get involved in blockchain clearing services.
Investors generally believe that "cross-border stablecoins" will become the core area of competition in the next stage of fintech.

X. Conclusion: The Cornerstone of Asia's Digital Finance Future

From the Hong Kong-China mBridge to the Hong Kong-Singapore joint clearing trial, Asia is promoting the regionalization of digital currencies through a pragmatic and collaborative approach.
Hong Kong and Singapore, one a gateway to China’s international finance and the other a financial hub in Southeast Asia, together represent the institutional strength and innovative direction of digital finance in Asia.

In the future, once the cross-border stablecoin clearing mechanism is officially put into use, Asian businesses, banks, and individual users will enjoy a more efficient, lower-cost, and safer cross-border payment experience.
This is not only a technological experiment, but also a significant milestone in Asian financial integration.

As stated in the Hong Kong Monetary Authority's statement:

"This is a crucial step for digital currency to move from concept to reality and from competition to collaboration."