An advisory body has urged the Hong Kong government to recognize digital currencies, while turning its attention towards blockchain or distributed led
An advisory body has urged the Hong Kong government to recognize digital currencies, while turning its attention towards blockchain or distributed ledger technology (DLT) in an effort to catch up with the likes of Singapore in the region.
The Financial Services Development Council (FSDC), an advisory body to the government established in 2013, published a research report named “The Future of FinTech in Hong Kong”.
“FinTechs and FinTech-powered incumbents elsewhere are coming out with superior propositions. Jurisdictions such as the UK, Singapore, Switzerland and Australia are introducing FinTech-friendly policies and regulations. Mainland China is already the global FinTech leader in terms of scale. Hong Kong, despite its large financial sector, as yet has only a modest showing in the FinTech space.”, as the research paper noted in its “Executive summary” (available here).
“Does this matter? Yes, FinTech matters to Hong Kong because over the coming decade or so it may dramatically alter today’s financial services delivery model. Since financial services contribute 18% of Hong Kong’s GDP and 6% of its employment, the impact will be considerable.”, added the report.
Another paper published by the Financial Services Development Council explained that DLT is particularly important for Hong Kong as it may transform the country`s financial sector, as well as its economic, social and even governmental activities. The research (available here) proposes an approach based on four main points:
- Government lead function
- DLT Hub
- Digital currencies
- Demonstration projects
“Potential efficiency enhancements could include providing digital identity for all Hong Kong residents and Hong Kong-registered companies on which DLT applications could be built, digistalising the Land Registry, Hong Kong’s intellectual property register and the Companies Registry, and supporting the Belt and Road Initiative.”, as the research elaborated.
Time will show whether the government will take these reports into consideration.