of the world's allocated reserve assets are currently held in us dollars, about 20 % in euros. these shares have largely been stable in recent years. however, fitch recently downgraded the us credit rating citing concerns about the state of the us government finance and its growing debt burden. adding to that, the ongoing geo - economic developments have also led many to rethink about diversification, despite the inertia towards the status quo. however, the reality is that 1 / 3 bis - central bankers'speeches there are not many good alternatives either. one might ask : will there be enough safe assets to provide sufficient diversity in the foreseeable future? how would gold feature as a reserve asset? there are no easy answers to these questions, and perhaps they deserve more discussions by experts in this room today. the second issue is the structure of the international monetary system in the future. currently, the international monetary system is predominantly a us dollar - based system, and the euro is mainly playing a regional role. this system has been the foundation of globalisation of the world economy for several decades. however, with increasing geo - economic fragmentation, to what extent will the world also move towards a more multipolar monetary system with different currency blocs? how would these blocs affect future financial stability and monetary policy considerations globally? the third issue is the development of central bank digital currencies ( cbdcs ). according to a 2022 bank for international settlements ( bis ) survey, 80 of the 86 central banks that replied are doing some form of work on cdbcs. about a quarter are piloting a retail cbdc, and more than 10 are building or already running a pilot wholesale cbdc programme. while retail cbdcs can improve financial inclusion and payment efficiency, wholesale cbdcs can potentially reduce the costs of cross - border payments and increase the speed to nearly real - time, which has the potential to profoundly transform the global payments landscape. however, a key question here is : how can we get the different cbdcs to connect and talk to each other, in order to support cross - border payments? to address this question, many global central banks including the hkma are already trying to figure out how to improve the interoperability between different cbdcs. looking further ahead, a more pertinent question would be : how will the advancements of wholesale cbdcs speed up the use of local currencies in cross - border payments,

peter pang : launch of the new cross - border collateral management service remarks by mr peter pang, deputy chief executive of the hong kong monetary, at the cross - border collateral management service signing ceremony and press conference, hong kong, 20 june 2012. * * * mr. grimonpont, mr. bhatia, ladies and gentlemen, good afternoon. it is my pleasure to welcome you to this signing ceremony. the bilateral agreements that i shall sign on behalf of the hong kong monetary authority with the euroclear bank and j. p. morgan today will pave the way for the launch of the new cross - border collateral management service, a critical building block of the cross - border bond investment and settlement platform launched in march 2012. the new service, which will commence on 25 june, will bring significant benefits to the contracting partners and the money market as a whole. for hong kong, it will advance the development of our repo market, enhance the stability of our financial system and strengthen further hong kong ’ s role as the global hub for offshore renminbi business. the repo market is a key component of major international financial centres. it serves as the link between the money and capital markets, and is vital to the well functioning of the financing channels. by providing credit enhancement through the use of securities as collateral, the repo market also serves as the lubricant that keeps the financial engine running particularly during times of risk aversion. the new collateral management service, with its cross - border, cross - system, cross - time zone and cross - currency capabilities, will provide an efficient repo infrastructure that will help develop the repo market in hong kong. the importance of the repo market as a financing channel has assumed added prominence since the outbreak of the global financial crisis in 2008. due to a combination of the large inflows of funds into hong kong in late 2008 and early 2009 and heightened risk aversion, the interbank money market has been less active in recent years and financial institutions have been more careful in lending funds to each other on an uncollateralized basis. the average daily turnover of the uncollateralized interbank market has dropped significantly, by 71 % from hk $ 286 billion in november 2007 to hk $ 83 billion in march 2012. the higher frequency of flight to quality, and resultant tightness in the global supply of us dollar, has also affected turnover in the currency swap market. the average daily turnover of