As Hong Kong and finance go hand in hand, Fintech Week is one of the most important events of the year, organized in particular by the Hong Kong Monetary Authority and the Securities and Futures Commission, and supported by the presence of Chief Executive John Lee and Financial Secretary Paul Chan.
Digital payment methods and tokenization were in the spotlight at this year’s event, attended by numerous start-ups and banks. Tokenization is an IT process designed to secure data on the Internet, a very useful tool for banks when it comes to protecting customer data.
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The forum comes at a time when Hong Kong is attempting to regain its position as Asia’s leading financial center, a title now contested by Singapore
The past few years have not been easy for the financial sector, notably due to political instability and the Covid-19 epidemic. Several regional head offices decided to migrate to the City-State during this period.
Many of those interviewed nevertheless cited their reasons for trusting the city, such as a strong legal system, based on Hong Kong’s Common Law, but also and above all the relationship with mainland China.
In his speech, John Lee reiterated the importance of Hong Kong as a global financial center, and also its role in China’s internationalization. The leader explained that 75% of foreign transactions in yuan were carried out in Hong Kong.
Ultimately, the government intends to promote the use of digital yuan, or e-CNY, which users of the Octopus application will be able to purchase. The e-CNY is a digital currency issued by China’s central bank.
Web3 and cryptocurrencies in the spotlight in Hong Kong
The highlight of Fintech Week was the Web3 industry and its application to the financial sector. The city is keen to attract investment and head offices to these activities and has begun to work towards this end.
As we have seen with tokenization, Web3 is not only aimed at banks but at a wide range of activities. Cryptocurrency exchange platforms, video game developers, and other blockchain-based sectors were all present at the event. In this sense, numerous other provisions, including legal ones, have been put in place by the authorities, particularly concerning the security of investors’ assets.
Web3 refers to all technologies based on blockchain, i.e. the idea of a decentralized Internet, whereas Web2 refers to a more traditional form of access via servers.
The world of cryptocurrencies in Hong Kong, however, was recently rocked by the JPEX affair, which prompted the autonomous region to tighten its regulations on the subject. JPEX was a cryptocurrency exchange platform originating in Dubai, but operating illegally in Hong Kong without a license.
Several dozen people were defrauded, to the tune of several million Hong Kong dollars. A scandal that had no impact on the government’s political will to continue its strategy in favor of cryptos, given the scale of the forum.
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First published in LE PETIT JOURNAL.COM. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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