The Hong Kong Monetary Authority (HKMA), the Bank of Thailand (BOT) and Hong Kong Exchanges and Clearing (HKEX) have published the results of a year-long proof of concept that settled tokenised carbon credit trades between Hong Kong and Thailand. The 24-page report, Cross-Border DvP in the Age of Tokenisation: Interoperability for Carbon Credit Transactions, sets out how the two central banks linked their own tokenisation platforms without building a shared ledger.
The work was done in a test environment and did not involve real money. Even so, it is one of the more detailed public accounts of how delivery-versus-payment (DvP) could work across two separately run central bank systems.
Two central bank platforms, one connector
The trial connected the HKMA's Project Ensemble with Project SAN, an internal BOT prototype started in June 2024 that remains at the proof-of-concept stage. Payments were made in tokenised deposits and central bank digital currency, with an FX provider that has settlement access in both jurisdictions converting between the two local currencies.
The link between the two is what the report calls an Interoperability Layer. It does not hold balances and is not a settlement system. Its job is to coordinate. Each central bank first freezes the money in escrow on its own system. The layer then confirms that both sides have met the agreed terms and lets the two legs go at the same moment. If either side falls short, both are unwound.
It is built from two RESTful API pieces. The Open Connector is the channel through which the two central banks communicate, while a local Adaptor on each side translates those messages into the format their own systems use, be it a real-time gross settlement system, a tokenised deposit platform, or a digital asset ledger. Messaging runs on the ISO 20022 standard: a pacs.008 message starts each payment and a pacs.002 reports back on its status. Settlement remains within each country's infrastructure and under its own legal framework.
"The results demonstrate that technology-neutral, interoperable models are feasible without a shared ledger," by the Hong Kong Monetary Authority, Bank of Thailand and HKEX
That is the main policy point. The design lets each jurisdiction retain full control of its own systems while still settling atomically with the other jurisdiction. It extends Hong Kong's broader tokenised deposit work, such as using tokenised deposits to settle its latest digital green bond, across the border.
What was tested
The project ran 19 validation tests. Fourteen covered cross-border tokenised deposit transfers in both directions, and five covered carbon credit DvP settlement through Core Climate, HKEX's carbon marketplace. InnoBlock, which provides the trading platform with HKEX, acted as Core Climate in the tests. The scenarios included failures as well as successful trades: wrong Business Identifier Codes or wallet IDs, liquidity shortfalls, and breaches of the settlement cut-off.
A further end-to-end scenario was added to include a registry. Towngas, acting as the project proponent, had carbon credit tokens minted into its wallet on the Northern Trust registry, transferred them to Core Climate, and sold them to a buyer in Thailand. Once the trade settled, the change of ownership was automatically recorded in the registry via an API link.
The test ran on simplified terms: one exchange rate agreed in advance, money posted up front (a trade without sufficient funds behind it failed on the spot rather than waiting in line), and a strict daily cut-off at 5pm in Hong Kong and 4pm in Bangkok.
The results
- Tokenised deposit transfers: about 20 seconds on average for end-to-end atomic settlement.
- Carbon credit DvP: about 30 seconds on average.
- Headline comparison: a complete carbon credit trade settled atomically in roughly 40 seconds. A conventional cross-border carbon token trade can take two to five business days.
- Exceptions: scenarios involving liquidity shortages, insufficient balances or a specific asset platform took longer, roughly 13 to 20 minutes.
Every trade settled in central bank money, over CBDC or RTGS rails. The report links this to the international Principles for Financial Market Infrastructures, because it provides final settlement with little credit or liquidity risk. When the team simulated disruptions, the layer automatically rolled back the cash leg, so no trade was left half done.
What did not work as well?
The report is candid about gaps. Failed trades exposed two weaknesses. The platforms told counterparties only that a trade had been refused, not why, and, in some test cases, a rejection and a rollback were sent together, so a single failure triggered two instructions. The authors want clearer rejection codes and mutex-style locks to stop the duplicates.
They also suggest looking at earmarking as an alternative to escrow. Earmarking would leave the money in the payer's own account, flagged for the trade, rather than moving it into an escrow wallet. The report says that could make the process simpler while still settling only when both sides' conditions are met.
The report also notes that allowing buyers and sellers to deal in their own currencies does not eliminate FX. Someone still swaps one currency for the other behind the scenes, and buyers pay for it in the price. The report suggests routing through the central bank's payment facility could trim that cost.
Why carbon credits
Carbon credits were chosen because the trades are inherently cross-border. Citing UNCTAD, the report notes that six economies account for over 75% of voluntary carbon credits, so buyers and project developers are often in different countries. Settlement typically means separate checks across marketplaces, registries and banks, with manual reconciliation at each step. The report cites MSCI's estimate that the voluntary carbon market was worth about US$1.4 billion in 2025 and is on track to at least triple by 2030. For the wider climate finance picture, see our analysis Beyond ESG: Architecting the Climate Economy.
"The adoption of carbon credit tokenisation and its corresponding automation introduces significant advantages for market participants, directly addressing pain points and inefficiencies in traditional cross-border carbon transactions," by the Hong Kong Monetary Authority, Bank of Thailand and HKEX
What it means for firms
The report creates no new rules or obligations. For banks taking part in Project Ensemble and its pilot phase, EnsembleTX, which the HKMA launched in November 2025, it is a useful guide to where the HKMA is heading on cross-border settlement. The design choices it endorses, ISO 20022 messaging, escrow or earmarking at the domestic level and settlement in central bank money, are worth tracking in technology roadmaps.
For carbon marketplaces and registries, the takeaway is the value of direct API links to banks and to each other. The report credits those links with removing manual checks and keeping records consistent in real time. Compliance and operations teams should also note the exception findings: in a multi-party cross-border flow, clear rejection reasons and a single, synchronised failure instruction matter as much as speed.
What comes next
Both central banks plan to feed the lessons into their own CBDC and tokenisation programmes at home. The report suggests further work could extend the model to additional jurisdictions, building a wider network of interoperable connections for atomic cross-border payment-versus-payment (DvP). HKEX says it will keep exploring ways to make Core Climate and its other climate finance offerings more accessible.
The two central banks have worked together since signing a fintech cooperation memorandum in 2019, including on Project Inthanon-LionRock and Project mBridge. The full report is available on the HKMA website.
