DBS Bank (Hong Kong) Limited has completed a pilot project as part of Phase 2 of the e-HKD Pilot Programme, an initiative led by the Hong Kong Monetary Authority (HKMA). The project focused on how tokenisation and programmability can improve digital voucher programmes. DBS Hong Kong partnered with ZERO2, an ESG rewards platform developed by Negawatt Utility Limited, to test new applications for digital money in Hong Kong.
The pilot used DBS Token Services, which combines tokenisation and smart contract features with the bank’s transaction banking services. This allowed the use of Purpose Bound Money (PBM) technology to set specific spending conditions on e-HKD vouchers. Participants received PBM-based digital vouchers after completing green actions through ZERO2. These vouchers could be spent at selected merchants, who then received instant payment in hypothetical e-HKD at the point of sale. Payments could be converted to HKD using the Faster Payment System (FPS), making settlement and reconciliation more efficient.
DBS Hong Kong plans to publish a detailed report later this year about its findings and benefits for stakeholders, which will align with HKMA’s own report on the e-HKD programme.
Jolynn Wong, Managing Director and Head of Global Transaction Services at DBS Bank Hong Kong, said: “DBS Hong Kong is deeply invested to shaping the future of payments. Our involvement in the HKMA’s Phase 2 of the e-HKD Pilot Programme and extensive tokenisation expertise underscore this commitment. At the forefront of programmable money and conditional payments, we are developing DBS Token Services to help corporates unlock efficiencies and deliver transformative, value-added services that redefine payments for our clients in Hong Kong.”
A recent survey by DBS Hong Kong found that almost half of over 100 small- and medium-sized enterprises surveyed are interested in adopting digital platforms that make it easier to track and reward staff participation in green initiatives. This suggests growing interest among businesses for customisable tools that encourage employee engagement in environmental efforts.
Arthur Lam, Chief Executive Officer at Negawatt Utility Limited, said: “ZERO2 actively promotes Hong Kong’s green economy. We are excited about our partnership with DBS Hong Kong, leveraging blockchain technology to incentivise practical ESG actions among corporates, merchants, and individuals through the innovative use of digital money and programmability. By quantifying ESG impacts at the individual level, we align with HKMA’s green finance initiatives. The successful pilot aims to contribute valuable insights to the HKMA for their assessment of the feasibility of mass adoption of an e-HKD within Hong Kong’s retail context.”
According to DBS Bank (https://www.dbs.com/), it operates across 19 markets in Asia from its headquarters in Singapore. The bank has been recognised for its leadership roles globally by several financial publications such as Global Finance and Euromoney.
The use of tokenised money is seen as having potential beyond rewards programmes; it may also be applied in treasury management, supply chain payments, and governance improvements within payment processes.
DBS continues its efforts supporting developments around digital money as part of building a strong financial ecosystem in Hong Kong.