Ripple Partners Fubon Bank to Give Hong Kong Residents Access to Property Equity

Ripple Labs, in partnership with Fubon Bank and other top companies, is working on a pilot project that will give Hong Kong residents access to property equity.

Leading fintech company Ripple Labs is developing a Home Equity Line of Credit (HELOC) pilot that will help Hong Kong citizens gain access to excess property equity.

According to a recent blog post, Ripple will develop the solution in partnership with Hong Kong-based Fubon Bank. Notably, five top companies, including Hex Trust, Stratford Finance, KodeLab, BCW, and TOKO, are backing Ripple and Fubon on the HELOC pilot. 

Ripple CBDC Marketing Head Reacts

Mary C. Hall, Ripple’s Head of Marketing for CBDC, also shared the development yesterday. Commenting, Hall stated that the solution is a proud moment for Ripple and its partners, as she highlighted the significance of the project.

This is a very proud moment for the Ripple #CBDC team & our partners. We've worked together on a proof of concept for hypothetical e-HKD Pilot Programme for #HKMA to help realize home equity. ? https://t.co/xvp6o1asBp

— Mary C. Hall (@SystemsandTech) October 31, 2023

HELOC Project

The HELOC project, part of the ongoing e-HKD pilot program, will see Ripple, Fubon, and its partners leverage groundbreaking technology to revolutionize the lending and real estate sectors.

As a result, the partners will deliver several key insights, especially addressing the growing demand for tokenized real estate equity and commercial bank empowerment. 

Under the HELOC project, Ripple will explore home equity lending using e-HKD as a settlement asset with advanced finance lending protocol and tokenized real estate.

Per the announcement, the first stage of the initiative involves the minting of e-KHD by Fubon Bank. As reported earlier, Fubon Bank will leverage Ripple’s CBDC platform for the creation of the hypothetical e-HKD.

Notably, the integration of e-HKD into the HELOC facility offers enormous benefits to users, including 24/7 access to property equity and funds, mitigating manual processes, and enabling real-time reporting.

Features of the HELOC Project

The partners listed four features of the pilot project, such as:

“Loan Application:

Users will have simulated access to the HELOC function via the bank’s application. Once the application is approved, a hypothetical e-HKD wallet and tokenized version of the property lien are allocated to the user.

Flexible Fund Drawdown:  

Under the program, users will have 24/7 control over the e-HKD funds, as well as real-time availability in their wallets.

Smooth Repayment:

Users can make repayments at their discretion. Also, they can leverage an automated function to repay the loans, thus helping in the transparent accounting for real-time interest accrual.

Closing the Facility

Once repayment is complete, the user can decide to close the facility and release the lien token to the bank wallet.”

HKMA CBDC Pilot Program

The HELOC project is part of the ongoing Hong Kong e-HKD pilot program. Earlier this year, the Hong Kong Monetary Authority (HKMA) selected Ripple and Fubon Bank to demonstrate a use case for the settlement of tokenized assets.

The duo will focus on real estate tokenization using the digital version of the Hong Kong dollar. Fubon Bank will oversee the conversion of the fiat version of HKD into a hypothetical e-HKD on a 1-to-1 exchange rate.

Once completed, the bank will issue the e-HKD as loans to customers, which can be viewed via a dedicated wallet. In the second phase of the pilot project, customers can use the hypothetical dollars to acquire real estate properties.