MIT-HKMA-AoF/HKIMR Joint Seminar by Professor Robert Townsend

About the Speaker
MIT Professor Robert M. Townsend is a theorist, macroeconomist, and development economist who analyzes the role and impact of economic organization and financial systems through applied general equilibrium models, contract theory and the use of micro data. As the Elizabeth and James Killian Professor of Economics at MIT, he is known for his seminal work on costly state verification, the revelation principle, optimal multi-period contracts, decentralization of economies with private information, models of money with spatially separated agents, forecasting the forecasts of others, and insurance and credit in developing countries. Townsend is also a Distinguished Research Fellow at the Becker Friedman Institute for Research in Economics at the University of Chicago, and a Research Associate at the National Bureau of Economics.

This event is made possible thanks to the support of the Hong Kong Monetary Authority (HKMA) and the Hong Kong Institute for Monetary and Financial Research (HKIMR).
About the Topic
The rise of dollar-backed stablecoins has disrupted the global financial landscape, challenging the fundamental structures of modern monetary systems. However, the underlying technologies—blockchain, smart contracts, and multilateral algorithms—offer a unique opportunity for beneficial integration rather than mere disruption. This seminar introduces "Macro-Mechanism Design" as a framework to synthesize these technologies with economic theory to create more efficient and stable financial systems.

Drawing on HKMA’s role as a key global financial innovator, we examine how these designs are being applied to real-world challenges:

• Closing the Credit Gap: Utilizing Project Dynamo to transform SME debt into a safe, investable asset class through tokenized trade finance.
• Optimizing Settlement: Leveraging Project Ensemble and Central Bank Digital Currencies (CBDCs) to settle interbank obligations and manage complex assets like carbon credits atomically.

We will explore how digital fiat money now possesses a "dual identity" as both a medium of exchange and mandatory collateral. By modeling the economy as a Wicksellian credit chain, we can identify and solve the "collateral bottlenecks" that traditional monetary policy alone cannot fix. The seminar concludes with a look at the dual policy architecture required for a digital age: coordinated monetary policy to manage collateral limits and new "Rights to Trade" markets to stabilize foreign exchange externalities.
Registration Deadline (No Walk-Ins Accepted)
Please register by 12:00 PM on May 13, 2026 (Wednesday). Due to access restrictions, all participants must be registered; no walk-ins accepted. Pre-registered access cards will be prepared in advance and provided by staff at HKMA lobby reception, Two IFC.

Info: (Register and collect your access badge at the HKMA Lobby, Two IFC. Please proceed to the 55th floor after registration.)

Info: (We will start promptly)

Event Venue & Nearby Stays

Hong Kong Monetary Authority, 8 Finance Street, Hong Kong, Hong Kong

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