DeFi
Hong Kong a unique testing ground for DeFi, metaverse, HKIMR studies show
As the city makes great efforts to become a virtual asset and Web3 hub, the reports offer insights to market players and regulators, locally and internationally, that will help shape policy initiatives and market innovations, Fung said during a press briefing on Tuesday.
Enoch Fung (left), executive director of the Hong Kong Institute of Monetary and Financial Research, and Giorgio Valente, head of HKIMR, hold copies of the DeFi and Metaverse surveys on Tuesday. Photo: HKIMR
HKIMR coordinated with consultancy PwC to conduct both surveys, studying organizations in the asset and wealth management, banking, insurance, virtual assets and metaverse services industries.
A total of 59 entities participated in the survey on DeFi, which consists of the provision of financial services without traditional financial intermediaries, offering a more profitable, accessible and secure alternative. Meanwhile, 55 institutions participated in the investigation into the Metaverse, a technology platform for experiencing virtual reality.
Local market players are increasingly fond of virtual assets. More than half of the financial institutions surveyed in the DeFi survey have already integrated such assets into their core businesses, while 85% of them plan to have done so within three years.
Virtual assets are digital representations of value that can be exchanged, transferred, or used digitally for payment or investment purposes. They include tokenized traditional assets, stablecoins, cryptocurrencies, NFT and products around custodian and tokenization solutions.
In the Metaverse study, 65% of respondents said they are involved in the world of virtual reality with applications ranging from marketing and promotion to internal operations and from talent recruitment to workplace social events that contribute to promote “interactions with customers, employees and the general public”. public,” said Giorgio Valente, director of HKIMR.
A common challenge is the lack of talent and expertise, which affects the progress of adoption of these technologies, according to reports. Other major obstacles include uncertainty in governance structures, legal and regulatory compliance, cybersecurity and data management risks.
Hong Kong has seen a wave of exits from some of the world’s largest cryptocurrency exchanges, including Binance and HTX, as the city has been criticized for its restrictive regulatory regime.
Fung said the guiding principle for regulating financial innovations around the world was “same business, same risk, same regulation,” with some local nuances.
” The general direction [in] the international community as a whole needs to ensure a certain level of consistency, coordination and collaboration on many aspects,” Fung said, referring to monitoring risks and data gaps.
“Hong Kong regulators have been very active participants in these regulatory discussions. We have a role to play within international standardization bodies, making our contribution and consolidating our role as an international financial center.”