The Hong Kong FinTech Week 2023 Recap
The recently concluded Fintech Week in Hong Kong in the start of November brought together industry leaders, policy makers, innovators to explore the latest trends and advancements in the financial technology sector. The OAX Foundation is pleased to be part of this pivotal event and participate in the conversation of Web3 development in the region. In this article we aim to recap some key highlights of the key themes and notable discussions, including the redefinition of Web3, tokenized securities, cross-border transactions, and the intended application of CBDC.
Hong Kong Government’s Pro Web3 Stance Continues:
In the opening remarks by the Hong Kong government during Fintech Week reaffirmed its proactive support for Web3 technologies. The city’s regulators are actively working on creating a favorable regulatory environment and have expressed their commitment to fostering the growth of the Web3 market, one of the key examples is the city’s considerations of having official regulations around stablecoins a few months back. Recognizing the potential of blockchain and virtual assets, alongside promoting the strengthening of regulations and risk control to ensure a secure and sustainable fintech ecosystem. The Securities and Futures Commission (SFC) released two circulars outlining requirements for tokenized securities, which opened up retail access to these products under specific guidelines.
eHKD and Its Impact on Everyday Life:
During Fintech Week, the concept of eHKD (electronic Hong Kong Dollar) was discussed, highlighting its potential to transform everyday transactions and financial services. The integration of digital currencies into the mainstream economy can streamline processes, increase efficiency, and provide greater financial inclusivity. Exploring the use cases and practical applications of eHKD was an important topic, signaling the ongoing evolution into a digital economy.
Cross-border payments were also a major highlight, conceptually noting that Octopus app (payment system in Hong Kong) users can now buy digital yuan (e-CNY) on the mainland through the app and Bank of China Hong Kong users can top up e-CNY wallets using their bank accounts, with plans to bridge mainland and Hong Kong financial systems. The mBridge blockchain project that links the mainland with Hong Kong, Thailand and the United Arab Emirates was a main feature of the Bank of China booth. The topic around payment is considered a breakthrough in Hong Kong, while we will be further expanding how payment is driving adoption in our upcoming OAX Foundation research.
Another focus of tokenization has been real estate, which was part of the HKMA’s recently concluded e-HKD trial, in which Ripple and Fubon Bank explored using a digital Hong Kong dollar for granting a home equity line of credit on a blockchain.
The Revival of Tokenization and Distributed Ledger Technology:
Another significant theme that emerged during the event was the resurgence of tokenization and the utilization of distributed ledger technology (DLT). Tokenization, although not a new concept, is gaining renewed attention as it offers opportunities for asset digitization and increased liquidity. The adoption of DLT, with its inherent transparency and security, provides a solid foundation for the tokenization of various assets, leading to greater efficiency and accessibility in financial markets.
Various initiatives in Hong Kong are embracing tokenization and blockchain technology across different sectors. Arta Techfin collaborates with Chainlink to facilitate tokenized funds and secure cross-chain transfers, leveraging Chainlink’s industry-standard infrastructural services. The Arkreen Project by Hashkey Group aims to aggregate community data to create a Web3 renewable data energy network, aligning with Hong Kong’s urban upgrade objectives. Hashkey has also released their token trading app for the retail market this month, enabling Bitcoin and Ethereum trading. OSL Digital Securities is exploring tokenized retail and fund products, envisioning a future with a wider range of investment options and increased credit quality for investors. Lastly, the tokenization of the RMS Titanic is seen as a reflection of Hong Kong’s growing recognition as an Intellectual Property trading hub, with Artifact Labs focusing on digitally preserving historical and cultural assets on the blockchain.
The mentioned initiatives and discussions in Hong Kong indicate a resurgence in the narrative around tokenization, highlighting renewed interest and enthusiasm for leveraging blockchain technology in various sectors.
Gaming as a Catalyst for Real Use Cases:
Gaming, a sector known for its adoption of blockchain technology, continued to play a prominent role during Fintech Week. Companies like Animoca showcased real-world use cases for blockchain in gaming, demonstrating the potential for decentralized applications and innovative business models. The intersection of gaming and blockchain serves as a testament to the practical applications and versatility of this technology beyond the financial sector, this topic was greatly explored in our previous article from OAX Foundation.
During a conversation with Karena Belin of WHub, Yat Siu, the founder of Animoca Brands, a Web3 unicorn based in Hong Kong, discussed the future of Web3. Siu highlighted that Hong Kong’s culture is highly compatible with blockchain due to its strong protection of property rights, capitalist infrastructure, and financial literacy. Gaming represents a significant opportunity for Web3. He explained that gamers have a desire for social interaction, but in the past, their engagement was limited to the confines of the game. Web3 addresses this limitation by enabling the transfer of digital identities and assets across different environments and communities. Siu emphasizes his belief that gaming is an ideal fit for Web3 and expressed confidence in its potential success.
The Significance in Progressive Adoption
The OAX Foundation is excited to see Hong Kong’s Fintech Week have placed a growing emphasis on Web3 compared with former years. Although we’re not seeing major technological breakthroughs, there is a great sense of progress in corporate participation and adoption to drive the space forward. Hong Kong’s financial structure has its own legacy in the financial system, the fact that it’s discussing an integration of virtual assets into the mainstream economy is already a big step. Despite the presence of bad actors in the digital asset space, we see there is still a strong sense of optimism and continued support from the government to drive the industry forward through better regulation measures lays a robust foundation.
In summary, collaboration between stakeholders, including industry players, regulators, government and technology providers, will remain crucial to foster innovation to drive mass adoption. OAX Foundation will remain committed to working with ecosystem players to address challenges and promote practical use cases that will ultimately benefit the decentralized industry as a whole.
More about OAX Foundation:
Reach out to OAX Foundation via e-mail:
Telegram English: www.bit.ly/OAXTGEn