Key Takeaways
- While DLT offers significant benefits, institutions face adoption challenges, such as lack of strategic alignment, emergence of novel risk, solution deployment and activation difficulties, and regulatory uncertainty, all of which hinder broader implementation. To help financial institutions overcome these hurdles, this paper provides practical guidance and strategies, including good practices, approaches and frameworks to:
- Develop a firm-wide DLT strategy with a dedicated DLT team;
- Deliver fit-for-purpose training programmes to ensure successful activation of DLT solutions;
- Establish mitigation plans for identified risks and challenges, including those related to third-party, concentration risks, smart contract, immutability, key management, cybersecurity, data privacy, and interoperability; and
- Advance DLT initiatives while ensuring compliance by adhering to established regulatory principles.
- The paper also highlights initiatives by the HKMA to create an enabling environment for DLT adoption. These include supervisory guidance to ensure regulatory clarity, trial facilities to support implementation, and talent development efforts to foster DLT expertise. Collaborative research and innovation are emphasised to position Hong Kong as a global leader in the responsible integration of DLT.
