Chainlink Powers Cross-Border Fund Transfers Between Hong Kong and Australia
Highlights
- Chainlink is facilitating the cross-border exchange of digital currencies between Australia and Hong Kong.
- The use case is part of the second phase of Hong Kong's CBDC project with key financial ecosystem players.
- LINK price is up by nearly 2% buoyed by the buzz around the deployment.
Chainlink is playing an advanced role in Hong Kong’s push for cross-border payment functionality for its central bank digital currency (CBDC) experiments. Leaning on Chainlink’s infrastructure, participants in the pilot will attempt to move tokenized funds between Australia and Hong Kong.
Chainlink Facilitates Cross-Border Digital Currency Exchange
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has been tapped to support the exchange of tokenized funds across national borders. According to a post on X by Chainlink, its CCIP will be used in a pilot program to securely exchange Hong Kong’s CBDC and an Australian dollar stablecoin. In May, World Liberty Financial tapped Chainlink to enable cross-chain stablecoin transfers for USD1, further demonstrating Chainlink’s growing capabilities.
The pilot project forms part of phase two of the Hong Kong CBDC project, e-HKD, with authorities keen on pushing the frontiers for cross-border functionalities. The pilot will attempt to swap e-HKD for A$DC, an Australian stablecoin, using blockchain technology for real-time settlement.
The initiative involves payment processor Visa and A$DC issuer ANZ, with Fidelity International and ChinaAMC serving as asset managers. In addition to CCIP, Chainlink confirmed that the use case also relies on its Digital Transfer Agent (DTA) solutions to enable multichain fund operations.
A closer look at Chainlink’s involvement reveals that CCIP will facilitate the Payment-versus-Payment (PvP) mechanism for digital currency swaps. Additionally, execution will be handled through the DTA model, ensuring compliance across multiple jurisdictions and token standards.
Cross-border transactions are gaining momentum, with companies like Apple, X, Airbnb, and Google exploring stablecoins for cross-border transactions.
LINK Price Reacts Amid Project Expansion Plans
According to the blog post, Chainlink intends to broaden its involvement in the CBDC initiative. To begin with, participants will work to extend the PvP workflow across the entire transaction lifecycle, with Chainlink playing a central role.
Expanding PvP across the full lifecycle offers several benefits, including the potential for 24/7 on-chain markets. Moreover, the blockchain-based environment will preserve user privacy while mitigating counterparty risks.
LINK price has rallied by nearly 2% following the buzz from the pilot project. LINK currently trades at $14.06, matching the broader enthusiasm of the cryptocurrency markets. Crypto prices are rallying amid growing speculation that Bitcoin’s price will reach $110K before the end of the week.
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