Hong Kong is positioning itself as a pacesetter within the world fintech panorama, specializing in crypto-related sectors resembling Decentralized Finance (DeFi) and the Metaverse.
Current government-sponsored analysis by the Hong Kong Institute of Financial and Monetary Analysis (HKIMR), a part of the Hong Kong Academy of Finance (AoF), has highlighted the significance of those digital frontiers in shaping the way forward for finance in Hong Kong.
Experiences revealed on June 25 analyze the affect and potential of DeFi and Metaverse applied sciences, highlighting their fast progress and new alternatives.
Hong Kong’s push for DeFi and the Metaverse
The DeFi examine confirmed a notable improve in market capitalization from $6 billion in 2021 to greater than $80 billion in 2023, indicating an growth that highlights the potential of the sector.
Though DeFi accounts for under 4% of the whole crypto-asset market, it stays largely untapped, with roughly 71% of Hong Kong crypto companies surveyed not but exploring this avenue.
The report stays optimistic about DeFi’s means to “re-engineer” monetary companies with improvements resembling “liquid charges, flash loans and automatic market makers”, promising to cut back transaction occasions and improve monetary inclusion.
In parallel, Metaverse’s analysis reveals that whereas native monetary establishments have proven sturdy curiosity, their participation stays average.
Nevertheless, greater than half of the survey respondents expressed skepticism about Metaverse’s potential, which doesn’t replicate the energetic stance of some Hong Kong fintech companies.
These companies are energetic in Metaverse-related developments, exploring how digital environments can play a key position in monetary companies.
Enoch Fung, CEO of AoF and Govt Director of HKIMR, emphasised that the interconnected nature of DeFi, Metaverse and the broader Web3 applied sciences is important to the way forward for Hong Kong’s monetary companies business. Fung particularly famous:
The rising applied sciences of DeFi and the meta universe, that are carefully associated to the broader developments of digital property and Web3, are prone to open numerous alternatives for the monetary companies business in Hong Kong.
Goes to Crypto Hub standing
Hong Kong’s broader technique contains changing into a central hub of cryptocurrency innovation and exercise. This intention is bolstered by current regulatory milestones resembling Hong Kong’s Securities and Futures Fee (SFC) issuing preliminary approvals to 11 cryptocurrency exchanges.
The event is a part of a broader effort to subject licenses for the Digital Asset Buying and selling Platform (VATP) that started in 2022 and goals to lift Hong Kong’s standing alongside main world crypto hubs resembling Singapore and Dubai.
Additional selling this atmosphere, business leaders imagine that Hong Kong could quickly introduce betting choices for spot Ethereum exchange-traded funds (ETFs), growing the attraction and performance of crypto-financial merchandise within the area.
Featured picture created with DALL-E, chart from TradingView