Beijing's sovereign digital currency push to boost Hong Kong's fintech start-ups

Hong Kong Monetary Authority, bridge project, Ping An OneConnect Bank, blockchain service network, cross-border trade and financing, one in very 125 Hong Kong residents

As Beijing pushes ahead with a sovereign digital currency and a national blockchain network, Hong Kong’s fintech community is using the city’s role as a bridge between mainland China and the rest of the world to seize opportunities for innovation.

China has been at the forefront globally in the development of a central bank digital currency, with 70.75 million retail transactions worth 34.5 billion yuan (US$5.3 billion) having been completed in a pilot trial as of the end of June this year. The People’s Bank of China has also been working with the Hong Kong Monetary Authority on a bridge project that will link up the digital yuan with sovereign digital currencies in Hong Kong, Thailand and the United Arab Emirates.

The project could lead to opportunities for the more than 3,300 start-ups in Hong Kong, allowing them to service importers and exporters using fintech. It could provide incentives for innovation in fintech and trade finance solutions, said King Leung, head of fintech at InvestHK, the government body promoting foreign direct investment.

“For fintech start-ups focusing on business-to-business solutions, there are only a handful of major cities that have a strong base of financial institutions,” said Leung. “Fintech needs to be where the financial hubs are, and if you are not in Hong Kong then there are only a few [remaining] options.”

Ping An OneConnect Bank, one of Hong Kong’s new virtual banks backed by China’s largest insurer, shows how fintech could help small and medium-sized businesses, Leung said.

Through a partnership with Tradelink, a trade and custom documents filing service provider, Ping An OneConnect has introduced an SME loan service that approves loans within five days. The new service leverages Tradelink’s decades of custom clearance data to determine a borrower’s credit health.

Hong Kong Monetary Authority, bridge project, Ping An OneConnect Bank, blockchain service network, cross-border trade and financing, one in very 125 Hong Kong residents

From left, Vishal Kapoor, Citi’s Hong Kong head of treasury and trade solutions, and King Leung, head of fintech at InvestHK. Photo: Edmond So

Another Hong Kong start-up, digiXnode Tech, which operates a marketplace for digital applications run on blockchain, this month launched its global portal connecting developers worldwide with the Beijing-led blockchain service network (BSN).

An ambitious project representing President Xi Jinping’s aim to make China a dominant player globally in information infrastructure, the BSN is led by a consortium that includes State Information Centre, China Mobile and China UnionPay. digiXnode is linking the network with offshore blockchain developers of cross-border trade and financing applications, easing the country’s trade with Belt and Road economies in the process.

“The next step is to get all the stakeholders in trade to get digitalised as well. These include all the shipping companies and logistic players,” said Vishal Kapoor, Citi’s Hong Kong head of treasury and trade solutions. “It will happen over time.”

Hong Kong Monetary Authority, bridge project, Ping An OneConnect Bank, blockchain service network, cross-border trade and financing, one in very 125 Hong Kong residents

Signage for the digital yuan in a supermarket in Beijing. China has been at the forefront globally in the development of a central bank digital currency. Photo: Bloomberg

Cryptocurrency start-ups, on the other hand, fear that the city could lose out its hard-earned advantage, built upon a strong regulatory framework, to Singapore. Unlike in China, where cryptocurrency trading is banned, in Hong Kong a regulatory framework is being put in place to enable cryptocurrencies to coexist with central bank digital currencies.

This is because the city’s virtual asset regulatory regime, which bans participation by retail investors and allows only professional investors, is considered restrictive. This could stifle entrepreneurs’ desire to innovate in Hong Kong, said Alessio Quaglini, CEO of Hong Kong-based digital asset custodian Hex Trust.

“If you have a framework with requirements that are cumbersome and stringent for young fintech companies, there is a risk that Hong Kong might start losing business activity to other markets that are aggressively trying to win them,” said Quaglini.

A professional investor is defined under Hong Kong securities law as someone with a portfolio of at least HK$8 million (US$1 million). The Singapore regime for payment tokens does not have a ban on retail investors.

In August, Hex Trust received its capital markets services licence from the Monetary Authority of Singapore, which allows it to expand its custodial service to the city state. The new licence is in addition to its trust or company service provider licence obtained in Hong Kong.

Still, with the city ranking fifth in terms of the density of high-net-worth individuals – one in very 125 Hong Kong residents have a net worth of at least US$5 million – InvestHK’s Leung said Hong Kong’s regime serves to balance investor protection and innovation.

“There is still a lot of wealth in Hong Kong. If a start-up just focuses on servicing professional investors, by dollar amount this is already a sizeable market,” he said.

Internet Explorer Channel Network
News Related

OTHER NEWS

The best wireless headphones 2021: our pick of the best ways to cut the cord

The best wireless headphones of 2021 include some of the most advanced audio devices we’ve ever seen. The best part? These wireless headphones come in all shapes and sizes, from ... Read more »

Malware can easily abuse Discord features to attack users

© Provided by TechRadar Malware Cybersecurity experts have successfully demonstrated that the features of gaming-centric messaging platform Discord can easily be abused for malicious purposes. Researchers from Check Point Research ... Read more »

New US rules on spyware exports try to limit surveillance tech like Pegasus

The US Department of Commerce announced a new rule to prevent the sale of hacking tools to China and Russia, The Washington Post reports. The Commerce Department outlined the change ... Read more »

How to customize your iPhone's app icons

Have you ever wanted to make your iPhone your own, with your individualized style and flair? Sure, you can change your home screen wallpaper. But if you really want to ... Read more »

Vergecast: Apple and Google's competing events this week

Every Friday, The Verge publishes our flagship podcast, The Vergecast, where co-hosts Nilay Patel and Dieter Bohn discuss the week in tech news with the reporters and editors covering the ... Read more »

Tokyo 2020 Olympics suffered half a billion attempted cyberattacks

Whilst the Olympic Games were taking place in Tokyo earlier this year, another, huge competition was also taking place behind the curtain – between the organization’s 200-people strong cybersecurity team, ... Read more »

The 47 best gifts for couples that they'll both enjoy

— Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission. Trying to pick out the perfect gift for your couple friends ... Read more »

A retail listing shows the specs of the Intel Core i9-12900K Alder Lake CPU

© Windows Central Intel Core i9-11900K review The specs of the upcoming Intel Core i9-12900K have appeared on a retail listing. What you need to know A retail listing reveals ... Read more »

Here's when you can start playing Age of Empires 4

© Provided by Windows Central Here’s when you can choose your civilization and begin gathering resources. At long last, Age of Empires 4 is on the way, soon to be ... Read more »

Not just Wix: Another Israeli Technology Enables No Coding Engagement Products

© Storycards Gil Rabbi, Co-Founder at Storycards Following the huge success of Wix in no-coding web design, another Israeli company, Storycards, led by engagement guru Gil Rabbi will bring no-coding ... Read more »

Human brain DECREASED in size 3,000 years ago, study finds

© Provided by Daily Mail MailOnline logo The size of the human brain has changed numerous times throughout human history, but the vital organ decreased approximately 3,000 years ago due ... Read more »

Rocket failure mars US hypersonic missile test

The Pentagon’s hypersonic weapon programs suffered a setback on Thursday when a booster rocket carrying a hypersonic weapon failed, people briefed on the test result said. © Andrey Rudakov /Bloomberg ... Read more »

The Navy released a scathing report about the fire on the USS Bonhomme Richard

This story originally published on Task & Purpose.​ © Mass Communication Specialist 3rd Class Christina Ross/U.S. Navy The Navy sailor who set the 2020 fire on the USS Bonhomme Richard ... Read more »

Get more done with 20% off HP's EliteOne 800 G6 all-in-one and other PCs

If you’re looking for a computer upgrade at work, HP has a few devices on sale right now that will definitely upgrade your office space. With the code HPEXCLUSIVETWENTYOFF, you ... Read more »

Twitter's algorithm favours right-leaning politics

© Getty Images Twitter amplifies tweets from right-leaning political parties and news outlets more than from the left, its own research suggests. The social-media giant said it made the discovery ... Read more »

Samsung's unique Frame TV is $500 off

Samsung’s The Frame doubles as both wall art and an HDR-compatible QLED TV. The television offers a decor-friendly design while also displaying customizable images when somebody’s in the room. When ... Read more »

Best Destiny 2 Exotic weapons and armor in 2021

© Provided by Windows Central These are the most powerful and efficient Exotics in the Destiny 2 sandbox. Exotics are the most powerful and unique items you can obtain in ... Read more »

Lukaku and Werner will miss Chelsea's next two games AT LEAST

© Provided by Daily Mail MailOnline logo Chelsea have been dealt a double injury blow ahead of this weekend’s clash with Norwich City, after Thomas Tuchel confirmed that they will ... Read more »

10 must-have plus-size clothes to buy from Old Navy

— Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission. I have no qualms admitting it: I love Old Navy. More ... Read more »

UK households offered £5,000 grants to replace boilers with heat pumps

The government recently announced that it will provide £450 million in funding to encourage households in England and Wales to install electric heat pumps. Over the next three years, it’s ... Read more »

New Microsoft 365 service identifies privacy risk before it's too late

Microsoft has announced new controls for Microsoft 365 that will help customers manage privacy of their users in accordance with the local laws. © Provided by TechRadar A representational image ... Read more »

Xbox series X stock - live: AO restock sells out – here's who could drop next

LIVE – Updated at 14:00 © iStock/The Independent Xbox liveblog hero Update: Argos has restocked the Xbox series X for collection in specific stores. Enter your postcode to check your ... Read more »

NASA's Deep Space Food Challenge awards $450,000 to first-round winners

© Provided by Space NASA and the Canadian Space Agency have teamed up for the Deep Space Food Challenge, which aims to spur new ideas about how to feed astronauts ... Read more »

China, space junk and more: Senators voice spaceflight concerns

© Provided by Space Cosmonaut Oleg Novitsky shared this photo of the International Space Station on Twitter on Sept. 29, 2021. He and two colleagues were relocating a Russian Soyuz ... Read more »

Challenge for astronomy: Megaconstellations becoming the new light pollution

© Provided by Space An astronomical image marred by trails caused by satellites of SpaceX’s Starlink megaconstellation. Satellite megaconstellations are quickly becoming a serious problem to 21st century astronomy akin ... Read more »

NASA's James Webb Space Telescope will face '29 days on the edge' after launch (video)

© Provided by Space Artist’s illustration of the James Webb Space Telescope with its massive sunshield fully deployed. NASA’s newest space telescope will face 29 “harrowing” days after launch as ... Read more »

10 incredibly stylish clogs to wear this fall

— Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission. Walk down the shoe aisle of a department store, open up ... Read more »

Sony's WH-1000XM4 headphones fall to $248, plus the rest of the week's best tech deals

This week brought our first official early Black Friday sale, courtesy of Best Buy. While we expect to see even more of these events before we hit Black Friday proper, ... Read more »

Best smart home devices 2021: automate your home with these gadgets

The best smart home device will ensure your property offers the perfect environment without you having to lift a finger. Whether you want the light dimmed to a certain level, ... Read more »

Trump's social network was defaced before it even launched

It took only a few hours for pranksters to find and deface a test version of former President Trump’s yet-to-launch social media platform called TRUTH Social. According to The Washington ... Read more »

The Verge Merch Store is back!

The Verge is celebrating its 10th birthday on November 1st, so we thought this would be the perfect occasion to relaunch our online merch store! Check out the store here. ... Read more »

Engadget Podcast: Apple's new MacBook Pros, the Pixel 6 and the Surface Duo 2

Techtober continues with a deep dive into Apple’s latest MacBook Pros, powered by the new M1 Pro and M1 Max chips. Cherlynn and Devindra also chat about what’s new with ... Read more »

Micro Center leaks specs and pricing for Intel's new Alder Lake Core i9 CPU

© Illustration by Alex Castro / The Verge Even though someone managed to secure early purchases of a couple of Core i9-12900K CPUs, we still didn’t have detailed information about ... Read more »

Someone got their hands on the unannounced Intel Core i9-12900K CPU

The Intel Core i9-12900K hasn’t even been announced, but someone got their hands on a pair of them. © Provided by Windows Central What you need to know A Reddit ... Read more »

Everything you need to know about the new Surface Duo 2

© Windows Central Surface Duo 2 Hero Got questions? We’ve got answers! Microsoft’s Surface Duo 2 is now officially available. Just like last year, we’ve compiled a mega list of ... Read more »

Haunted Chocolatier looks like the perfect follow-up to Stardew Valley

The creator of Stardew Valley has announced the title of his next game: Haunted Chocolatier.  © Provided by TechRadar Haunted Chocolatier logo on a starry backbround In Haunted Chocolatier, you’ll ... Read more »

Fury over 'absurd' GP plans to 'STRIKE'

© Provided by Daily Mail MailOnline logo Doctors in England were today slammed for threatening industrial action over being ‘asked to do the very basics’ of their jobs, amid a ... Read more »

This Google Workspace update might finally help you be productive working from home

Making the distinction between work and personal apps should be more straightforward thanks to a new update coming to Google Workspace. © Provided by TechRadar laptops The online collaboration suite ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic