UK’s Kodelab to provide lending tech for HKMA CBDC pilot with Ripple and Fubon Bank
Ripple and Taiwan’s Fubon Bank have selected UK digital assets consultancy Kodelab to provide the lending protocol technology for a central bank digital currency (CBDC) pilot with the Hong Kong Monetary Authority (HKMA).
The pilot is seeking to combine a simulated CBDC and tokenised real estate within the mortgage lending process as part of the regulator’s three-rail approach to its digital currency development, which began a year ago.
Running in parallel with each other, rail one involves establishing the technological and legal frameworks for CBDCs, while rail two consists of industry pilots and correcting design and implementation issues.
Depending on the progress of these two rails, the regulator intends for them to eventually merge, at which point it is expected to unveil a full timeline for final issuance.
Kodelab says its technology will enable the creation of “ultra-flexible credit” with bricks and mortar real estate serving as collateral.
The firm will also apply its Bank View product to the pilot with Fubon Bank acting as administrator and the HKMA as overseer.
The consultancy claims to have previously experimented with two-tier indirect CBDC models, where a central bank issues the digital currency but its distribution and access are facilitated through intermediaries.
This prevents the mass flight of capital from fiat-backed bank accounts to fiat-based CBDC accounts centred in the lending process – a benefit Kodelab cites in its experimentation of the model.