Hong Kong launched a five-year fintech strategy on Monday, pledging to promote artificial intelligence and tokenization initiatives responsibly to strengthen the city’s position as a leading fintech hub.
The Hong Kong Monetary Authority (HKMA), which unveiled the plan at the flagship Fintech Week conference, said it expected to launch more than 40 initiatives to embed AI in finance, build a financial tokenization ecosystem, create data and payments infrastructure, and improve the resilience of the entire sector.
“Ten years ago, the term fintech was far removed from the general public, but now fintech is part of everyday life,” Eddie Yue Wai-man, chief executive of the HKMA, said at a press conference after presenting the Fintech 2030 strategy.
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He said Fintech 2030 was the third phase of Hong Kong’s fintech strategy for the financial sector, noting that the first phase, launched in 2017, introduced digital banks, and the second phase in 2021 emphasized the practicality of fintech.
The HKMA said the aim of Fintech 2030 is to serve as a blueprint to prepare Hong Kong for the future. Photo: Yik Yeung-man alt=The HKMA said the goal of Fintech 2030 is to serve as a model to prepare Hong Kong for the future. Photo: Yik Yeung-man>
“The emphasis of fintech 2.0 was on the practical use of fintech for payments and transactions, while fintech 3.0 is more about resilience and charting the future of fintech,” Yue said. “Over the next five years, we will have 40 measures in four areas to ensure that Hong Kong has deeper development, more resilience and, most importantly, we must be prepared for the future.”
The first Fintech 2030 project, likely to be implemented later this year, could be for the settlement of tokenized money market funds.
The plan is to have a comprehensive settlement system for existing tokenized money market funds in the market.
“Banks can use tokenized deposits to settle these funds, (and) regarding inter-bank settlement, we would also like them to use the central bank’s digital currency for settlements,” Yue said.
Other uses of tokenization could follow in green finance, carbon emissions trading, corporate treasury management and cross-border trade finance, he added.
Yue said the HKMA was in talks with the central banks of Brazil and Thailand to use blockchain and tokenization to make cross-border trade transactions “faster and cheaper”, while making it easier for small and medium-sized businesses to obtain trade financing to expand their businesses.