TechFlow news, April 16 — The Hong Kong Monetary Authority (HKMA) released guidance on distributed ledger technology (DLT), supporting banks in adopting DLT under controlled risks. The HKMA aims to clarify its key regulatory considerations to further promote broader industry adoption.
The guidance emphasizes establishing proper governance and ensuring appropriate design of DLT initiatives. The HKMA stresses that banks bear ultimate responsibility for their use of DLT and must establish sound policies and risk management frameworks. When designing DLT projects, banks should consider factors including the type of network, use of smart contracts, legal and third-party risk management, and interoperability with other systems. The HKMA highlights the importance of ongoing monitoring and robust cybersecurity measures, and requires banks to comply with relevant data privacy regulations and to establish contingency plans and testing arrangements.
