The Hong Kong Monetary Authority (HKMA) and Invest Hong Kong co-organised the 2019 Hong Kong Financial Technology Week. The five-day event (November 4, 2019 – November 8, 2019) attracted thousands of participants from all over the world. PANews participated in the conference as an official cooperation media.
In the area of blockchain, the heads of the Hong Kong Monetary Authority, the Securities Regulatory Commission and the Hong Kong Stock Exchange have issued important views and launched a number of initiatives.
O1 and the central bank to carry out trade linkage based on blockchain
The subsidiary company of Hong Kong Interbank Clearing Co., Ltd. signed a Memorandum of Understanding with the affiliates of the Digital Currency Research Institute of the People's Bank of China to conduct a proof-of-concept trial aimed at connecting the “trade linkage” with the People's Bank of China's trade finance platform. Proof of concept is expected to begin in the first quarter of 2020. After the completion of the docking, it will provide more convenient trade financing services for the two enterprises, and also accelerate the development of financing business of Hong Kong banks.
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Based on the results of the earlier concept test conducted by the HKMA on the blockchain, 12 major banks, under the promotion of the HKMA, began operating a trade finance platform called “Trade Linkage” in September 2018. The “trade linkage” has been continuously improved after its launch. At present, its main functions include: digitizing trade documents (such as purchase orders and documents) to help trade participants effectively verify and transmit trade documents on the platform;
Encryption technology ensures that only trade participants can share trade information, and participants can also use trade materials to apply for financing from banks. Automate transaction process operations (such as automatic receipt of receipts, purchase orders, and automatic reconciliation of receipts after shipment).
In order to promote cross-border trade financing, the HKMA has been actively seeking “trade linkage” to connect with trade platforms in other regions. The People's Bank of China Trade Finance Platform (PBCTFP) provides financial services for public finance services in mainland China. The platform was first released on September 4, 2018, and was officially launched in Shenzhen.
The platform uses blockchain technology to provide financial institutions with commercial applications for trade finance, safeguarding the authenticity of trade data and lowering the threshold for data acquisition.
The “trade linkage” and PBCTFP will deepen the cooperation between Guangdong, Hong Kong and Macao, and promote the interconnection of financial infrastructure between the Mainland and Hong Kong, and strengthen the mutual financing of financial information between the two financial institutions, relying on the huge trade volume between the two places. The docking of the platforms will hopefully accelerate the expansion of the trade finance business of Hong Kong banks.
The cooperation plan will carry out a proof-of-concept test for the docking “trade linkage” and PBCTFP. The two platforms will also conduct joint research in the technical fields such as blockchain and network communication.
The plan is expected to begin in the first quarter of next year and will be implemented by the operators of both platforms. Upon completion of the docking, it will provide more convenient trade financing services for the two enterprises to accelerate the expansion of the financing business of Hong Kong banks.
O2 and the Central Bank of Thailand jointly study the central bank digital currency
As a follow-up to the Memorandum of Understanding signed by the HKMA and the Central Bank of Thailand in May 2019, the two sides are conducting a joint research project called “LionRock-Inthanon” to study “central bank digital currency” on cross-border The application of payment, thereby facilitating the simultaneous settlement of dual currency foreign exchange transactions between banks in Hong Kong and Thailand. The relevant joint report will be announced in the first quarter of 2020.
In 2017, the HKMA collaborated with three Hong Kong note-issuing banks, Hong Kong Interbank Clearing Limited and the R3 Alliance to conduct a research project called Project Lion Rock on Central Bank Digital Currency (CBDC). ) Make a study. The findings confirm the potential of CBDC for cross-border payment applications.
The Monetary Authority and the Central Bank of Thailand signed a Memorandum of Understanding on financial technology in May 2019 to strengthen cooperation in promoting financial innovation. Subsequently, at the invitation of the Central Bank of Thailand, the Project Lionrock-Inthanon proof-of-concept trial was jointly planned to link the prototypes of the two CBDC platforms developed in the previous concept verification projects.
The Lionrock-Inthanon project aims to enable banks in the two places to use CBDC as a payment instrument for cross-border payment, foreign exchange and settlement of Hong Kong dollar and Thai baht between banks in the two places to enhance the efficiency of current cross-border payments and strengthen foreign exchange liquidity management. Reduce compliance costs.
The project will explore the principle of determining the exchange rate in the interbank market, establish a cross-border capital transfer model through CBDC, and conduct research on technical compliance, operation and scalability. The joint report will be announced in the first quarter of next year.
O3 Li Xiaojia: Blockchain redefines economic relations
Perhaps the most daring subversive is the ambitious Hong Kong Stock Exchange CEO Li Xiaojia. In the era of digital economy driving technological innovation, he bluntly hopes that the HKEx can become a pioneer in leading the global industry.
For example, he mentioned that from the gasoline sold at the gas station to the microwave oven leaving the department store, by capturing relevant data, the technology can provide insight into market activities and conduct in-depth research on economic performance. In the future, data can be traded as a new asset class. ”
At present, China is the only big country to reach this level of digitization. This foundation will sprout another potentially huge subversion—to establish a completely different block-based economic governance system.
"If the economy can be organized through technology, then the government does not have to build a large number of bureaucracies, a large number of regulatory forces, and a lot of trust in institutions like the West." Li Xiaojia said, "The blockchain can redefine people and people. The economic relationship between them."
During the roundtable “Financial Technology Investment – Bubbles and Reality”, Jon Ulrich, Managing Director of JPMorgan Chase, said that the potential of the blockchain lies in “simple, beautiful and intangible”, which reminds us that to be truly successful, innovation must Being part of everyday life, like the air we breathe, is not absent but essential.
The advancement of financial technology is not a win-win match between humans and machines. As TIMO co-founder Claude Spiese puts it: “The purpose of innovation is not to improve technology, but to drive customer interest. If you can make a cup of coffee better than artificial intelligence algorithms, then do it with a cup of coffee. ”
Tarun Mathur, co-founder of Policybazaar.com, said it's important to remember that while new technologies help drive the proliferation of products and services, ecosystems are defined by customers rather than providers. of.
O4 combined with traditional securities announcement trading platform regulatory position
During the financial technology week, on November 6, the Hong Kong Securities Regulatory Commission announced the "Post Book" on the trading platform supervision, which indicates that China's supervision on blockchain cryptocurrency transactions has taken an important step.
In fact, from the regulatory framework of November 1 last year to the STO policy of March 28, and the October 10 virtual asset investment fund management company license application rules to today's policy, are promoting the securities pass and virtual Asset investment in Hong Kong's industrial development.
The Chief Executive of the Securities and Futures Commission (SFC), Odari, said at the event that the new regulations on digital assets allowed the virtual asset trading platform to obtain operating licenses and improve regulatory and industry standards to prevent fraud. The SFC requires licensed trading platforms to provide services only to professional investors and requires operators to take insurance measures to ensure that customers are protected in the event of lost or stolen assets.
Odari said that the new regulatory framework is a major development and said: "It draws heavily on the standards of traditional securities firms and automated trading systems, but at the same time applies them to the technology currently used in the industry."
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