During the Hong Kong Fintech week that took place a few weeks ago, The Cryptonomist was present and interviewed Mr King Leung, Global Head of Fintech, Financial Services and Sustainability at InvestHK.
Hong Kong is heavily focusing on the regulation of exchanges and especially stablecoins, and to achieve this, there are three teams working.
“Hong Kong has a stock exchange, while there are many crypto exchanges out there, which is why it is necessary to have strong and important regulation for these platforms”,
Leung explains to us.
The reason for this interest in stablecoin is quickly explained: low costs for cross-border payments.
“Stablecoins have interesting use cases especially when it comes to cross-border payments, useful for the low fees, otherwise we’re talking about 10/15% for transactions with countries like Mexico or Peru with which we work a lot,”
Leung explains to us.
The goal of Hong Kong is to design a license for companies that create stablecoins, so that it is not the same as the one payment companies must have, but a specific license, for example, to require companies to conduct periodic audits by one of the Big 4 (KPMG, Deloitte, PwC, Ernst Young).
The sandbox launched by the HKMA allows companies to experiment with use cases, supporting the development of SMEs and start-ups. This ensures effective supervision and stress tests these new technologies before they are formally introduced to the public.
The HKMA is also encouraging companies participating in the regulatory proposal to explore currencies other than the Hong Kong dollar for stablecoins with reference to fiat – an approach that sets it apart from other regulators in the region.
Hong Kong, Switzerland and the regulation of stablecoin
In June of this year, Leung and Nikoletta Csanyi, Executive Director of the Crypto Valley Association, in Switzerland signed a Memorandum of Understanding (MoU) to strengthen mutual relations and promote collaboration between the fintech ecosystems of Hong Kong and Switzerland at the Crypto Valley Conference of 2024.
“This agreement aims to strengthen the already solid relationships between Invest Hong Kong (InvestHK) and the Crypto Valley Association (CVA), with the specific goal of fostering collaboration, driving technological advancements, and creating opportunities for growth and innovation between our ecosystems”,
explains Leung.
The memorandum of understanding has been designed to facilitate the exchange of timely information on the market, allowing companies from both locations to better understand the trends and progress of fintech.
The objective is to encourage companies, startups, and investors interested in exploring the opportunities of these sectors, offering relevant information and facilitating networking opportunities.
“The signing of the Memorandum of Understanding (MoU) at the beginning of this year symbolizes a significant step towards strengthening collaborative ties and advancing cooperation between the fintech ecosystems of Hong Kong and Switzerland. The agreement aims to reinforce the already strong relationships between Invest Hong Kong (InvestHK) and the Crypto Valley Association (CVA), with the specific goal of fostering collaboration, promoting technological advancements, and creating opportunities for growth and innovation between our ecosystems,”
Csanyi explains to us.
The Hong Kong Fintech Week
The Cryptonomist, together with six other Chinese, Korean, and Thai newspapers, has been invited by the local government to participate in the Hong Kong Fintech Week 2024.
This is an event that this year saw the participation of 30,000 people with more than 800 speakers and over 700 sponsors for this ninth edition. Among the sponsors, we can include 1inch, Circle, HSBC, Crypto.com, Standard Chartered, City Bank, Visa, Google, Polkadot, and many others (well… over 700).