Blockchain is Mounting its Force in Hong Kong Fintech Sector
Blockchain companies are progressively dominating the financial technology sector of Hong Kong. It has 39% of new firms launching in the country’s fintech industry in the previous year running with distributed ledger technology or DLT.
Based on Hong Kong’s Financial Services and Treasury Bureau, DLT represents a more dominant share of the country’s new fintech firms year-over-year, up compared from 27% as of 2018.
According to a report by Hong Kong’s treasury department on June 1, it showed a detailed snapshot of blockchain’s increasing growth within the territory.
Aside from that, blockchain holds the fastest-growing segment of the territory’s fintech industry. It comprises 22 of the 57 fintech firms launched in Hong Kong during the past year operating with DLT.
Then, WealthTech has the second-fastest-growing sector with 20% of new fintech firms. And Payments followed this with 17% and InsurTech with 9%.
In the report, it notes that since April 2019, the number of fintech businesses running in Hong Kong has surpassed 600. And these include the issuance of eight virtual bank licenses and four virtual insurers.
The report found out enterprise DLT solutions comprise the largest sub-sector of the territory’s blockchain industry. And it represents 45% of Hong Kong’s distributed ledger firms.
In addition to that, trading platforms for cryptocurrencies holds 27% of Hong Kong’s blockchain sector. Then, it is followed by digital asset custodians with 14%, and trade finance settlement with 9%.
The report indicates that blockchain is part of artificial intelligence, big data, and cloud in comprising the pile of technologies underpinning the tectonic shifts seen in Hong Kong’s virtual banking sector. Also, they employ DLT in some InsurTech initiatives made to overhaul and modernize the territory’s insurance industry.
The treasury of Hong Kong also mentioned acceleration in the embrace of fintech and blockchain technologies amid the coronavirus pandemic. And the said outbreaks highlighted a lot of efficiency savings and utilities offered by DLT.
Crypto Garage, a Japanese blockchain development company, has announced that it was launching commercial service on its Settlenet platform. And this is for the crypto OTC market.
In the update of Digital Garage’s website on June 8, its Crypto Garage venture would launch a commercial service for Settlenet. It is a settlement system using Blockstream’s Liquid Sidechain.
Settlenet specializes in over-the-counter or OTC transactions of digital assets for trading companies, crypto exchanges, asset managers, and brokers. Also, it has been in development since January 2019. That was when Crypto Garage acquired regulatory approval from the Financial Services Agency (FSA) of Japan for a demo version.
Digital Garage explained, “In this demo, we went beyond proof of concept using a test environment and succeeded in solving the problem of simultaneous settlement of actual digital assets and Japanese yen funds on a side chain.”
In January 2020, it filed a report with regulators in Japan on the one-year pilot program.
Moreover, the launch of Settlenet happened as new laws for regulating crypto in Japan are beginning to be imposed. Last May 1, updates to the country’s Payment Services Act (PSA) and Financial Instruments and Exchange Ast (FIEA) took effect.
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