Jointly organised by the Government of Hong Kong Special Administrative Region and the Hong Kong Trade Development Council (HKTDC), the 2024 edition of the Asian Financial Forum will continue to build upon its previous editions and set new milestone in bringing discussions from as Asian perspective at the start of 2024.

A Retrospective: The 2023 Forum’s Unparalleled Confluence

The Asian Financial Forum of 2023 was staged on a positive note under the theme of ‘Accelerating Transformation: Impact . Inclusion . Innovation’. Spread over two days in January 2023, the Hong Kong Convention and Exhibition Centre opened its doors to an assembly of over 2,500 on-site attendees, complemented by an impressive cadre of 4,500 virtual participants hailing from more than 70 countries and regions.

This grand forum of thought leadership highlighted the imperative roles of market intelligence, financial innovation, and the bridging of professional networks. With a staggering attendance where three-quarters were CEOs and senior decisionmakers, the event served as a crucible for policy shaping and strategy development.

Unveiling Financial Frontiers: Key Themes and Dialogues

Over 40 discussion sessions captivated the audience with insights into the arenas of Global Economy & Policymaking, Asia-led Multilateralism, Asset & Wealth Management, and the burgeoning field of Insurance Innovation. The thematic pillars of Impact, Inclusion, and Innovation were meticulously addressed, with a keen focus on pressing issues such as environmental sustainability, social governance, and technological advancements in the financial industry.

Timely and critical themes including environmental, social, and governance (ESG) criteria, net-zero climate initiatives, gender empowerment, capital market inclusion, and the frontier technologies of Banking 5.0, virtual assets, and Web3 were thoroughly explored, highlighting the forum’s commitment to depth and diversity in content.

The Fintech Showcase: A Hub of Technological Prowess

The Fintech Showcase, alongside the InnoVenture Salon, the FintechHK Start-up Salon, and the Global Investment Zone, stood as a testament to the forum’s visionary ethos, housing more than 120 institutions from various sectors, all at the forefront of the technological revolution and global investment opportunities.

These included heavyweight financial institutions, agile tech companies, forward-thinking startups, and dynamic investment agencies, all converging to unveil the potentials of tomorrow’s markets.

The InnoVenture Salon epitomised the forum’s commitment to nurturing the next generation of entrepreneurs. Over 70 international venture capital firms, accelerators, and institutional collaborators came together, engaging in more than 80 e-pitching sessions designed to empower startups with essential mentorship and growth capital.

Cultivating Tomorrow’s Innovators

Parallelly, the FintechHK Start-up Salon emerged as a crucible for innovation. Here, a dozen start-ups had the opportunity to showcase their novel technologies to an audience of potential investors and users, marking a leap towards the next chapter of fintech evolution.

“This is our second time at AFF’s FinTech HK Start-up Salon and the first time for us to experience the physical format AFF provides an excellent opportunity for us to meet with key decisionmakers, given the traffic and seniority of the participants,” commented Joel Lee of Singaporean startup Protos Labs.

The Hybrid Triumph: Deal Flow Matchmaking Session

The AFF Deal Flow Matchmaking Session triumphantly combined physical and virtual interfaces at the AFF2023, co-organised by the HKTDC and the Hong Kong Venture Capital and private Equity Association (HKVCA), orchestrated over 600 one-to-one meetings that connected investors, project owners, and innovators.

This facilitated an unprecedented level of networking and partnership, setting a new paradigm for business interactions, underlining the forum’s unmatched capability in fostering strategic partnerships.

“We have spoken to many potential clients and investors throughout the two-day event. It was awesome to see their interest in our products and solutions and I am looking forward to continuing the discussion with leads generated during the AFF,” shared Brendon Shane Nell of Intensel (Hong Kong).

A Glimpse Into the Future: AFF 2024

The Asian Financial Forum of 2024 is set to convene over 3,000 members of the global financial community in a fully-fledged scale next January. While innovation continues as a underlying pillar across the agenda, the forum will spotlight the global business community, policy makers and regenerators in joining hands to foster multilateral cooperation for a shared future.

“Hong Kong is one of the capitals of finance of the world, and it is also a hub that connects Southeast Asia and also to the rest of the world. It is therefore important for me to come here to learn about the future of financial service sector, connect with the community here and spot startups to invest,” noted Dr Jochen Biedermann from the World Alliance of International Financial Centres based out of Germany.

The Epicentre of Financial Mastery

The 2024 agenda will cover a broad array of topics including the global economic outlook, assets management opportunities on Mainland China, insurance and risk management, and many more engaging focal points. Industry experts will also explore investment opportunities and the way forward for green finance, impact investment, generative AI, and more. The President of the UN Sustainable Development Solutions Network, Professor Jeffrey D. Sachs, will be one of the notable speakers at the keynote luncheon during AFF2024.

AFF 2024 early bird registrations are now open ahead of January 24 and 25. Project owners seeking investment partners, fintech innovators, investors and high-net-worth individuals, entrepreneurs, venture capitalists, startup ecosystem facilitators, along with professionals from the entire breadth of financial and corporate institutions are encouraged to register their interest early, and be at the forefront of the new paradigm for business interactions and productive outcomes in Asia.

Register now for the AFF 2024 with these promo codes for Fintech News Network readers and enjoy exclusive discounts: S-AM13-ML (Standard Pass) | F-AM13-ML (Full Pass)

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The HKMA commenced its exploration into retail CBDCs with Project e-HKD in 2021, diving into the global conversation with active participation in cross-jurisdictional collaborations. “Given the plethora of convenient retail payment options in Hong Kong, an e-HKD would need to add unique value to the current payment ecosystem, for instance, by providing new or innovative use cases,” reflects the authority.

e-HKD Pilot Programme Tests the Waters with Industry Collaboration

Adopting a practical use-case driven methodology, the HKMA initiated the e-HKD Pilot Programme in November 2022 under Rail 2 of its strategic plan. This programme is critical for exploring commercially viable applications for e-HKD in partnership with the industry. The programme has attracted submissions from 16 firms across the financial, payment, and technology sectors to participate in its Phase 1.

The submitted use cases are diverse, encompassing six distinct categories: full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions, and settlement of tokenised assets. These categories represent the potential scope of e-HKD’s application, indicating the HKMA’s commitment to integrating innovative technology with everyday financial transactions.

Versatile, Full-Fledged Payment Solutions

The programme’s first case study, involving HSBC, demonstrates e-HKD’s capability as a comprehensive payment method, mirroring the convenience of cash, credit cards, and electronic payments.

The use of a private blockchain for transactional processes underscores the potential for secure, swift settlements, enhancing the efficiency of everyday transactions.

Programmable Payments and Smart Contracts

The second case centers on programmable e-HKD. This approach leverages smart contract technology to establish a more secure and trust-based environment for consumer transactions, particularly in the context of prepayments in the retail sector.

This use case, explored by China Construction Bank (Asia) and Bank of China (Hong Kong), involves programmable e-HKD to bolster consumer protections through “retail escrow” products, highlighting the versatility of smart contracts.

Bridging the Digital Divide with Offline e-HKD Transactions

Recognising the diverse demographic of Hong Kong, where digital literacy varies, the programme has piloted offline e-HKD transactions. Standard Chartered Bank, Giesecke+Devrient, and ICBC (Asia) have focused on enabling e-HKD transactions through both digital and physical means, exploring the use of technology like near-field communications (NFC) for secure offline transactions.

Their pilots focused on secure, offline transactions using NFC technology, integrating e-HKD within both smartphone wallets and physical smart cards. This ensures that the benefits of digital currency are accessible to all, regardless of their comfort with technology.

Tokenised Deposits and Web3 Integration

The fourth case study, undertaken by Visa, Hang Seng Bank, and HSBC, blurs the lines between tokenised deposits and e-HKD, offering insights into how these two concepts can coexist and complement each other within the same ecosystem. The three pilot participants studied and tested the atomicity and interoperability of various payment scenarios.

Furthermore, Mastercard’s pilot into the integration of e-HKD with Web3 transactions, particularly involving NFTs, opens a new frontier for digital currency applications beyond traditional financial markets. Mastercard’s pilot explored the “wrapping” of e-HKD for use in non-native blockchains, simulating transactions involving physical goods and corresponding NFTs.

Real Estate and Credit Innovations

The sixth case, explored by Fubon Bank and Ripple, delves into the realm of real estate, demonstrating how e-HKD can be used in innovative credit solutions like home equity lines of credit.

This pilot involved using property lien tokens as collateral for residential mortgage loans, highlighting the potential for digital currencies in streamlining and securing complex financial transactions such as property mortgages.

Future Prospects and Collaborative Approach

The completion of Phase 1 of the e-HKD Pilot Programme has shed light on the versatile applications of e-HKD, setting the stage for further exploration. The next phase aims to expand upon these initial successes, delving deeper into selected pilots to address business and implementation challenges.

Key areas of interest will include enhancing transaction efficiency, expanding accessibility, and exploring new use cases that could benefit from digital currency integration.

The success of the e-HKD Pilot Programme thus far can be attributed to the collaborative efforts of various stakeholders, including financial institutions, technology firms, academia, and government bodies. As the HKMA moves forward, it will continue to foster these partnerships, both locally and internationally. This approach is crucial for staying aligned with global trends and ensuring that Hong Kong remains at the forefront of digital currency innovation.

By laying the groundwork for a digital currency, the HKMA is not only positioning Hong Kong as a leader in financial technology but also ensuring the city remains at the cutting edge of payment solutions. The e-HKD Pilot Programme serves as a cornerstone for this venture, heralding a new era in digital finance.

The post 6 Ways Hong Kong’s e-HKD Pilot Initiative Explores the Future of Currency appeared first on Fintech Hong Kong.

This includes facilitating peer-to-peer (P2P) and person-to-merchant (P2M) transactions both online and offline. Octopus, Alipay HK, WeChat Pay, Tap & Go, PayMe, and BoC Pay are the six significant players in this segment.

Hong Kong e-Wallets Achieving Critical Mass

According to a recent ecosystem report by Quinlan & Associates titled “Winning Hong Kong’s Merchant Payment War – Revisiting the Battle Plans of Hong Kong’s E-Wallet Providers,” these six major e-wallet providers have successfully built sizeable user bases. Octopus leads the pack with a staggering 6.2 million registered users.

In addition, they have gained impressive penetration on the merchant front, amassing over 150,000 acceptance points for digital transactions. For example, Alipay HK and Octopus claim deployments at over 150,000 and 170,000 local retail outlets respectively.

Moving Beyond Payment: Creating Holistic Ecosystems

Worldwide, e-wallets have made significant strides in democratising access to digital payments, particularly for underserved or unserved customer segments. In a digital age where consumers are increasingly mobile-enabled and digitally savvy, e-wallets offer an unmatchable level of convenience.

The flexibility in top-up options and enhanced digital connectivity brought about by integrated social elements in P2P features are key advantages. While originally functioning as standalone applications focused on digital transactions, most leading e-wallets globally have evolved into holistic ecosystems, often represented on mobile devices as a super-app.

They now offer lifestyle and value-added services that cater to both merchants and customers. This differentiates them from other digital payment solutions and adds layers of utility and attractiveness for end-users.

Impact of COVID-19 and Consumption Vouchers on e-Wallets in Hong Kong

The COVID-19 pandemic triggered a seismic shift in consumer behaviour throughout the world, most notably a sharp rise in e-commerce spending. Transaction values of Hong Kong e-wallets surged by a Compound Annual Growth Rate (CAGR) of 14% between 2019 and 2022, reaching HKD 249 billion. This now constitutes 19% of the total retail Gross Merchandise Value (GMV).

Moreover, for the Special Administrative Region, the distribution of consumption vouchers exclusively through e-wallets led to a substantial increase in user adoption. In 2021, these vouchers saw a cumulative 6.3 million recipients, comprising both existing and new users, across the top four major e-wallets in Hong Kong.

Competitive Landscape and Monetisation Challenges for Hong Kong’s E-Wallets

While these providers continue to grow, there are several headwinds to consider. In a bid to capture a greater share of the local merchant payment market, providers are embarking on numerous strategies designed to bolster their P2M business.

However, this competitive environment means higher customer acquisition costs and limited opportunities for broader merchant adoption. Furthermore, merchant inactivity remains a significant issue affecting monetisation, largely due to suboptimal payment experiences and lack of loyalty programmes aimed at merchants.

While QR code payments are widely embraced, the research uncovered that they are often seen as less convenient compared to Near Field Communication (NFC) payment methods, such as credit or debit cards. The latter takes a mere six seconds for transaction completion, while QR code payments can take up to thirty seconds.

This has led many customers in Hong Kong to still prefer established NFC payment methods, especially for the quick transactions that e-wallets should be known for.

Future Directions and Monetisation Strategies

Given the current challenges, e-wallet providers need to refocus their strategies. Quinlan & Associates suggest adopting a mix of merchant acquisition models tailored to the scale and needs of prospective businesses. They also recommend a more nuanced marketing strategy to optimise return on investment (ROI).

To address monetisation challenges, e-wallets could explore avenues such as value-added subscription fees for merchants or fixed fees for specific services, taking cues from service providers in other countries. These include introducing subscription fees for value-adds like Japanese e-wallet provider, PayPay, for merchants to access a range of value-added services.

South Korea’s Kakaopay meanwhile charges merchants to advertise on their messaging platform. In Indonesia, ShopeePay imposes a fixed fee for every top-up made by customers from non-SeaBank (owned by the same parent company as ShopeePay) accounts. Hong Kong e-wallets could also impose a fee to handle chargeback requests, much like global online payment processor, PayPal.

Moreover, beyond their core payment functionalities, e-wallet providers can capitalise on their sizeable user and merchant bases to offer a broader range of financial and lifestyle services. This could include services like restaurant reservations or ride-hailing, turning their platforms into one-stop super apps.

The Hong Kong e-wallets landscape has seen remarkable growth and transformation over the past few years, driven by shifts in consumer behaviour and strategic innovations from service providers. However, as the market matures and becomes more competitive, providers will have to grapple with a variety of challenges, particularly those related to merchant acquisition, customer retention, and monetisation.

And yet despite these hurdles, futureproofing e-wallets looks promising in an ecosystem with matured players like Hong Kong, as with every challenge, comes ample opportunities for those willing to adapt and innovate.

The post E-Wallets Hong Kong: Who’s Leading, Opportunities, and Challenges appeared first on Fintech Hong Kong.

Since its economic upswing in the 1960s, Hong Kong has also drawn a vast number of international investors. A prosperous business environment, sophisticated infrastructure and a competitive job market continue to make the region appealing for those looking for new job opportunities abroad in emerging fields such as fintech.

Hong Kong’s Advanced Fintech Ecosystem

Despite an economic downturn, a lull in venture capital funding activities, and a wave of redundancies across the global fintech market following optimistic hiring during the pandemic years, there are approximately 550 fintech companies in Hong Kong, creating numerous employment opportunities.

Indeed, the fintech landscape in Hong Kong climbed from eighth to among the top five globally between 2020 and 2021, amid all the uncertainty. The Chinese special administrative region and Singapore are the only Asian territories in the top five, joining California’s Silicon Valley, New York City, and London.

Hong Kong undeniably holds vast potential for fintech. A 2022 study by InvestHK estimated that over 500 fintech startups are operational in the city. A surge of blockchain and Web3 companies is expected to further fuel growth in this broader space, with Hong Kong positioning itself as an international cryptocurrency hub.

During the Hong Kong Fintech Week 2022, Financial Secretary Paul Chan and the Hong Kong Monetary Authority (HKMA) had much to say regarding the territory’s start-ups’ progression in utilising blockchain protocols to develop innovative products and solutions in conjunction with Web 3.0 technologies including cryptocurrencies, decentralised finance (DeFi), NFTs, and stablecoins, among others.

Perception of Fintech Jobs in Hong Kong

According to the 2023 eFinancialCareers global fintech report, 90% of respondents based in Hong Kong expressed a desire to work in fintech, a higher percentage than those in London, New York and Frankfurt. However, some concerns have been raised about the internal appeal of Hong Kong fintech jobs.

A number of the most valuable Hong Kong fintechs have received underwhelming online employee reviews, as discovered by eFinancialCareers when surveying fintech startups on job and employer rating platform, Glassdoor.

ZA Bank, Hong Kong’s leading digital challenger bank, for instance, only received a Glassdoor rating of 2.7 stars from Hong Kong employees. The 2023 reviews criticised the “heavy workload” and “poor management, location and structure.” However, one review did mention that “the benefits are overall acceptable.”

WeLab, a fintech offering a range of services including being a virtual banking competitor to ZA, had a marginally better rating of 2.9 stars despite criticisms of an “extremely backwards” culture. WeLab and ZA topped our list of Most Well-Funded Fintech Companies in Hong Kong, so how did the others in that 2022 list do in terms of jobs satisfaction?

Notable, Foreign Firms Face Issues, Too

Hyphen Group, which has since rebranded to MoneyHero and appointed a new CEO, has a questionable 2.7 rating on Glassdoor overall, but its Hong Kong reviews drop to a paltry 2.1 stars. Reviews decry the “serious problems with top management” and a “questionable company direction.”

Supply chain financing platform Qupital similarly sports a 2.4 stars rating. More than one review cites “chaotic management” and “poor decision-making”, with one former employee summing up the environment as “management should improve, hire more senior & experienced techies”.

In addition to local fintechs, several companies founded elsewhere are building teams in the city. Some of these are also expanding into Singapore, and it seems that employees in Hong Kong are more welcoming of them.

European payments giant checkout.com is an example of this, with an average Glassdoor rating of 3.2 stars. While this drops considerably to 2.6 in Singapore, Hong Kong employees rate the fintech at 3.8 stars. They appreciate the “good benefits and work-life balance,” but acknowledge a “steep learning curve.”

Balancing Culture and Compensation

While company culture might be impacted by drawbacks, remuneration for fintech jobs in Hong Kong, especially for in-demand product or tech roles, may. For instance, at crypto spot trading exchange OKX, Glassdoor estimates the average pay for a product manager to be HK$450k, considerably above the city’s average of HK$100k.

At the aforementioned Hyphen Group, developers are projected to earn HK$384k, well over ten times the country’s average developer salary. In other places, good remuneration could be balanced with a thriving culture as well.

XanPool, a crypto-fiat-gateway software solution headquartered in Hong Kong, sports an impressive 4.5 out of 5 stars rating, with glowing reviews that praise it’s “good salary” and good “career growth opportunities”. The XanPool team is lauded as “great colleagues”, including the technical positions with some software engineers remarking their team boasts knowledgeable, “very competent seniors to learn from, cool colleagues and a fun place to work at.”

However even the positive reviews acknowledge the closure of XanPool offices in places like Singapore and Malaysia, with around 40 workers reportedly laid off. Several 2023 reviews highlight the positive rewarding culture, but only if you are “an A Player”, which might suit young go-getters but perhaps not those with a lot of commitments or prefer work-life balance.

Web3 Firms Tout “Work Life Balance”

Similar praise was heaped on digital asset custodian Hex Trust, with a 4.1 rating and reviews that gush about the “great company culture”, “good benefits”, and being given the autonomy to take on blockchain-related tasks outside of their own specialisations.

Airwallex also subverts expectations, with Hong Kong reviewers bucking the fintech’s overall score of 3.4 stars with 4.7 stars for its HK operations. Reviews posted in 2023 hail that “the caliber of people is really high” at Airwallex, but that the cross-border payments provider is “still going through some growing pains.”

The most outstanding, however, has to be digital payment company Reap, which pulls in a perfect five stars based on at least five reviews from a mix of current and former employees — but this could also be because the size of the team is still relatively small. Some of the notable comments include “employee friendly, work life balance” and “Amazing company. Amazing management. Good pay. Family environment.”

One reviewer lamented how the small team size could be both a pro and a con, saying employees get the opportunity to “do everything” and gain “wide experience”. On the downside, workers need to be independent learners, as the lean team does not leave much room for “opportunities to specialise and not a lot of employee mentoring resources inside the company”.

Perhaps the most telling comment left by a current Reap employee is “Development of people, partnerships and profits are the important priorities to management. Collaboration and openness are valued.”

Image credit: Image by Freepik

The post What It’s Like Working in the Fast-Paced Hong Kong Fintech Jobs Market appeared first on Fintech Hong Kong.

This growth highlights the increasing importance of Hong Kong as a regional and international hub for green and sustainable finance.

According to the report, co-produced by the Climate Bonds Initiative in collaboration with the Hong Kong Monetary Authority (HKMA) and the Hong Kong Green Finance Association (HKGFA), with support from Standard Chartered, GSS+ bond volumes that aligned with Climate Bonds definitions from Hong Kong issuers witnessed a 60% year-on-year decline, reaching US$5.3 billion in 2022.

However, the cumulative volume of GSS+ bonds by the end of 2022 stood at US$27.2 billion, and green bonds accounted for over three-quarters (76%) of the total.

Hong Kong’s pacesetting commitment to climate action

Hong Kong has been at the forefront of embracing the opportunities presented by green finance and green bonds. The Hong Kong Green Finance Association was established in September 2018, bringing together approximately 100 market practitioners and business leaders to position the Special Administrative Region (SAR) as a green finance capital.

Since 2019, the Hong Kong Special Administrative Region (HKSAR) Government has successfully priced ten green bonds, totaling US$9.8 billion by the end of 2022, denominated in USD, EUR, CNY, and HKD. This volume exceeds that of any other government in the Asia Pacific region, equivalent to the combined sum of sovereign deals from Indonesia, New Zealand, Singapore, and South Korea.

In November 2020, the Chief Executive of the HKSAR announced the target of achieving carbon neutrality before 2050. The city further outlined specific strategies and actions in Hong Kong’s Climate Action Plan 2050 in October 2021.

The HKSAR Government pledged to allocate around HK$240 billion (US$31 billion) over the next 15 to 20 years for climate change mitigation and adaptation.

Hong Kong SAR then made history in May 2022 by issuing an HK$20 billion (US$2.6 billion) bond with a coupon linked to the Hong Kong Consumer Price Index (HKPCI), becoming the first government globally to issue an inflation-linked green bond.

This issuance was also the largest retail green bond worldwide, allowing residents to directly contribute to greening Hong Kong while diversifying the range of retail financial products available in the city.

Government’s role in driving green finance

Hong Kong aims to consolidate its position as the regional green and sustainable finance hub, leveraging its established status as an international financial center.

The report highlights that sovereign or government GSS+ bond issuers have the ability to scale up green and sustainable finance more effectively than any other issuer class, making a substantial contribution to the market beyond capital raising.

Recognising the potential economic growth associated with addressing climate change, the HKSAR Government is actively promoting transition and pursuing its climate agenda.

In the upcoming five financial years starting from 2023, the government plans to increase the annual issuance of green bonds under its Government Green Bonds (GGB) Programme to HK$65 billion (approximately US$8.3 billion) while expanding the scope to include sustainable finance projects.

Hong Kong’s innovations in green ‘blockchain bonds’

In February 2022, the HKSAR Government published an updated version of its Green Bond Framework to align with Hong Kong’s latest climate commitments and international standards in the green bond market. Shortly after, the Financial Services and the Treasury Bureau (FSTB) outlined the government’s approach to developing a vibrant sector and ecosystem for virtual assets, which included a pilot project for tokenising GGB issuance targeted at institutional investors.

Hong Kong authorities achieved a groundbreaking milestone in the fast-developing arena of blockchain bonds by successfully issuing tokenised green bonds — once again, the first of their kind issued by any government worldwide.

This HK$800 million (approximately US$102 million) tokenised issuance has been commended by public sector leaders in Hong Kong as a significant step toward promoting the use of distributed ledger technology (DLT) in the bond market.

Hong Kong aims to solidify its position as a regional hub for green technology and finance. The city is already home to a growing list of greentech firms and successfully issued the world’s first tokenised government green bonds in February.

In 2022, Hong Kong was the leading issuer of green and sustainable debts in Asia, raising US$80 billion, as highlighted in the Hong Kong Green and Sustainable Debt Market Briefing.

Hong Kong Financial Secretary, Paul Chan, expressed the city’s ambition to attract investments and become a center for green technology and finance. The government plans to develop its green technology ecosystem, foster cross-sector collaboration, accelerate innovations in green financing, facilitate easier access to funds for businesses, and attract talent from around the globe.

Additionally, Hong Kong aims to advance fintech and embrace Web3, recognising it as a significant arena for financial innovation with vast opportunities.

Hong Kong spearheads green finance innovation and regulation

The Hong Kong Monetary Authority (HKMA) has been actively involved in the intersection of blockchain-based bond issuance and green finance over the past few years. Collaborating with the Bank for International Settlements (BIS) Innovation Hub and the private sector, the HKMA launched ‘Project Genesis’ 18 months ago, developing two DLT-based prototype platforms for issuing retail green bonds and monitoring their environmental impact.

And of course, the HKMA has been running the GGB Programme, a long-standing initiative aimed at promoting the development of green finance.

Currently the HKMA, with support from Climate Bonds, is leading the development of a green classification system (taxonomy) specific to Hong Kong. The system seeks to facilitate easy alignment with the Common Ground Taxonomy, Mainland China’s taxonomy, and the European Union’s taxonomies.

Working groups have explored various aspects related to the formulation of the Common Ground Taxonomy, including standards and verification services, green buildings, decarbonisation roadmaps, transition finance, low-carbon supply chains, green technology, and climate investment funds.

Hong Kong’s commitment to green finance and its innovations in the field of green bonds and blockchain technology are positioning the city as a leader in sustainable finance. With its ambitious goals, supportive initiatives, and active involvement in global collaborations, Hong Kong aims to become a premier center for green technology and finance, facilitating the transition to a sustainable future.

The post HK Leads The Way as Sustainable Financing Hub with US$ 10B Green Bonds Issued appeared first on Fintech Hong Kong.

However, despite their potential, all eight digital banks in Hong Kong have yet to turn a profit since their introduction in 2020. A report by Quinlan & Associates explored the factors hindering digital banks’ profitability in Hong Kong and examined what those banks are doing to leverage their advantages to overturn negative balance sheets in the coming years.

Challenges for Digital Banks in Hong Kong

One of the significant challenges for the newer digital banks that have sprouted up in Hong Kong is the high cost of customer acquisition (CAC). Compared to emerging Asia and frontier Asian markets, the CAC for retail customers in Hong Kong is considerably higher, ranging from US$65-90.

Additionally, the average deposit levels per customer in Hong Kong are ten times lower than traditional banks, limiting the monetisation potential through lending and investment products.

Furthermore, digital banks in the Asia Pacific region face overarching challenges such as trust issues and fierce competition from both neobanks and incumbent banks investing in digitalization.

Digitally Addressing Pain Points

However, the Quinlan report highlighted Hong Kong has the opportunity to learn from profitable digital banks operating globally. By catering to a digitally-savvy customer base, digital banks can offer tailored solutions that meet their needs.

This extends to small and medium enterprise (SME) customers who face pain points such as a slow onboarding process, lengthy loan applications, and difficulty accessing credit due to collateral requirements and perceived risk.

To address these pain points, Hong Kong digital banks are raising customer awareness through digital-first marketing strategies. Collaborating with local influencers, offering attractive rewards, maintaining an active presence on social media platforms, and targeted ads are some of the strategies employed.

Additionally, digital banks are simplifying and digitising the onboarding process using technologies like mobile phone OCR (optical character recognition) and biometric identification. These advancements eliminate the need for physical branch visits and provide 24/7 onboarding services, taking as little as two minutes to complete.

Innovative Strategies by Hong Kong Digital Banks

Leading digital banks in Hong Kong, such as ZA Bank and Mox Bank, have implemented innovative strategies to engage and serve their customers better. ZA Bank has introduced a gamification campaign called “ZA Quest,” where customers can earn rewards by completing quests within the bank’s app. This enhances the customer experience and encourages exploration of the bank’s offerings.

Mox Bank, on the other hand, has implemented granular budgeting tools called “Generation Mox” to boost customer engagement. Users can create sub-accounts with specific saving goals and receive reminders to save money, thereby helping them achieve their savings targets effectively.

Expanding Product Offerings

Most virtual banks in Hong Kong are prioritising the expansion of their lending capacity and product offerings. They have introduced deposit and lending products, and some are now offering additional financial services such as insurance and wealth products.

These expanded offerings aim to cater to the diverse needs of both retail and SME customers, filling the funding gaps that many SMEs face in Hong Kong.

Streamlined Lending Process

Digital banks in Hong Kong have transformed the traditional lending process by leveraging credit algorithms, machine learning, AI technologies, and alternative data.

Through these technologies, banks have significantly reduced documentation and in-person interview requirements, making the lending process streamlined, convenient, and accessible. SMEs and consumers can now apply for loans completely online with minimal paperwork, resulting in faster turnaround times and improved efficiency.

Enhancing Customer Service

Digital banks in Hong Kong utilise various tools for customer maintenance and service, replacing the need for physical branches. Some offer a 24/7 customer hotline and leverage AI and natural language processing to provide automated and personalised responses to customer queries.

Chatbots and live chat functionalities connect customers with service representatives in real time, ensuring round-the-clock support.

Utilising Advanced Technologies

Cloud technology plays a significant role in Hong Kong’s digital banking landscape. Virtual banks like Mox Bank, WeLab Bank, and Ant Bank have adopted public clouds, which provide cost-effective solutions for data management, scalability, and product development.

Public clouds improve data collection and storage capabilities, streamline data processing, and ensure advanced security measures to protect sensitive information.

Building a Strong Partnership Ecosystem

Digital banks in Hong Kong have established extensive partnership ecosystems across the customer value chain. These partnerships allow for collaborative content marketing, joint incentives, and referral agreements, enhancing customer awareness and acquisition.

Additionally, partners can co-create innovative solutions that meet the specific needs of target customers, facilitating product delivery and development processes.

Digibanks in Hong Kong face challenges in achieving profitability, primarily related to customer acquisition costs and lower average deposit levels. However, by learning from successful digital banks globally and employing innovative strategies, Hong Kong digital banks can overcome these challenges and enhance the customer experience.

Simplified onboarding processes, personalised marketing strategies, expanded product offerings, streamlined lending processes, advanced technologies, and strong partnership ecosystems are key components for their success. As the digital banking landscape continues to evolve, these banks are well-positioned to meet the evolving demands of customers in Hong Kong and drive the future of banking in the region.

The post High Customer Costs a Drawback for Hong Kong’s Digital Banks Profitability appeared first on Fintech Hong Kong.

In order for digital asset exchanges to legally function in Hong Kong, they must abide by a multitude of rules, ranging from guaranteeing the safekeeping of assets to the avoidance of conflicts of interest, as well as meeting cybersecurity standards.

The new framework also mandates these exchanges to establish and implement exposure limits for their retail clientele, and only permit trading in tokens that maintain high liquidity. Notably, as crypto trading is presently outlawed in China, the operators cannot accept retail traders from the mainland.

Crypto exchanges have been given a year’s transition period to secure a retail licence from the Hong Kong Securities and Futures Commission (SFC). The new regime requires all trading platforms and exchanges to apply for a licence, failing which would result in fines and jail terms.

This regulatory adjustment has been introduced amidst intensified scrutiny on leading cryptocurrency exchanges, following a succession of significant mishaps such as the FTX trading platform’s unexpected, swift collapse.

Amidst the evolving regulatory and acceptance climate impacting digital assets globally, Hong Kong has made known its intention to become a crypto innovation hub, and enabling trading by retail investors is a part of that transition. 

Over 80 crypto companies have expressed desire to apply for the retail crypto licence in Hong Kong. Here are 10 notable ones that have announced plans to apply for the licence:

HashKey PRO

HashKey Pro is a new regulated virtual asset exchange that is operated by Hash Blockchain Limited, a member of the digital asset financial services group HashKey Group. Designed to provide professional investors automated trading services for cryptocurrencies and other innovative assets like security tokens, HashKey Pro has received approval from the SFC to operate a virtual asset trading platform under a Type 1 (dealing in securities) licence and a Type 7 (providing automated trading services) licence for professional investors.

HashKey Pro is also one of the platforms to have announced its submission for the licence application to offer retail crypto services in Hong Kong.

Gate.io 

Gate.io is a leading global cryptocurrency exchange that is operated by Gate Group, offering diverse trading services with 100% user-verifiable Proof of Reserves, and it has grown to serve over 12 million users globally.. It has been consistently ranked as one of the top 10 cryptocurrency exchanges based on liquidity and trading volume, topping Forbes Advisor’s list of Best Crypto Exchanges for 2023.

Gate.io has announced its intention to apply for the retail crypto licence in Hong Kong through its Hong Kong-based company, Hippo Financial Services Limited, which has already obtained a Trust or Company Service Provider (TCSP) Licence that allows it to provide virtual asset custodial services to global users. The company plans to launch Gate HK, a new platform tailored to serve the Hong Kong market.

CoinEx 

CoinEx is a Hong Kong-based cryptocurrency exchange that offers various trading services, including spot, margin, perpetual contract, and leveraged ETF trading. CoinEx has signalled its intention to apply for the retail crypto licence in Hong Kong by launching a local platform called BitHK, which submitted its Virtual Asset Service Provider (VASP) licence application to the SFC on 1 June, 2023.

Huobi

Huobi is one of the world’s largest crypto exchanges that also operates a Hong Kong-based subsidiary called Huobi Technology Holdings or Huobi HK, via which Huobi has revealed its submission for a VASP licence application to the SFC. Huobi HK has also started offering crypto spot trading and virtual asset custody to retail and institutional clients in Hong Kong.

OKX

OKX is another major crypto exchange that is headquartered in Hong Kong, has a local entity called OKX HK Limited, and was one of the first to declare interest to apply for the retail crypto licence, along with Huobi. OKEx rebranded as OKX in 2022 to declare it had become “more than an exchange” thanks to a wider range of products. 

OSL

Digital asset platform OSL was the first to obtain approval from the SFC to operate a virtual asset trading platform under Type 1 and Type 7 licences in 2020, and has now confirmed to Yahoo Finance that it is planning to expand its services to retail investors. OSL offers various services, including brokerage, exchange, custody, and even software-as-a-service (SaaS). OSL is operated by BC Technology Group, which claims to be the world’s first and only SFC-licensed, listed, digital asset wallet-insured, Big-4 audited digital asset trading platform for institutions and professional investors.

BitMEX

BitMEX is a crypto derivatives exchange that was founded in Hong Kong and recently settled a US lawsuit over anti-money laundering violations. The Seychelles-based cryptocurrency exchange offers various trading services including futures, perpetual contracts, and options. BitMEX revealed its intention to apply for the retail crypto licence by launching a new platform called BitMEX Hong Kong, offering spot trading and cryptocurrency conversion.

Binance

It’s no surprise that Binance, the world’s largest cryptocurrency exchange by trading volume that allows users to trade over 350 digital assets, has shown interest in this opportunity to offer services in Hong Kong, which is a major financial hub in Asia. 

Binance currently does not have a licence to operate in Hong Kong. and has faced regulatory scrutiny from other jurisdictions over its compliance issues. By obtaining a licence in Hong Kong, Binance could demonstrate its commitment to following the local laws and regulations and attract more customers who value security and legitimacy.

ZA Bank

ZA Bank is one of the first and largest virtual banks in Hong Kong with over 400,000 customers as of June 2022. According to CoinTelegraph, ZA Bank is also interested in applying for a retail crypto licence in Hong Kong, reportedly planning to partner with “with locally licensed virtual asset exchanges to obtain regulatory approvals”.

ZA Bank plans to apply for the licence to meet the changing needs of its customers in Hong Kong, where the bank has previously stated its intentions to act as a “settlement bank” exclusively with licensed crypto exchanges that comply with regulatory requirements. By obtaining a licence in Hong Kong, ZA Bank could leverage its virtual banking platform and offer a convenient and secure way for its customers to access the crypto market.

Greenland Holdings

Greenland Holdings is one of the largest and most diversified real estate companies in China, with a global presence in over 10 countries. Chinese state-owned Greenland Holdings has a strong portfolio of real estate projects in various regions, and has been seeking to diversify its revenue sources amid ongoing market challenges, setting up Greenland Financial Technology Group with the intention to trade assets including cryptocurrencies, NFTs and carbon credits.

By applying to obtain a licence in Hong Kong, Greenland Holdings could leverage its real estate expertise and offer a novel and integrated way for its customers to access the crypto market.

As the world watches to see who will secure these coveted retail cryptocurrency licences, it’s clear that the digital assets sector continues to evolve and disrupt traditional financial paradigms.

Most of these noteworthy companies have publicly expressed their interest in obtaining the licence, but there may be others that have not disclosed their plans yet. The wider industry will have to wait until the SFC announces the applicants – not to mention which applications the governing body will be accepting.

The post 10 Companies Vying for the Hong Kong Retail Crypto License appeared first on Fintech Hong Kong.

Last week, the Hong Kong financial regulator issued a circular reminding banks of their responsibility to offer access to legitimate crypto businesses. The HKMA emphasised the need for a risk-based approach to anti-money laundering and counter-financing of terrorism (AML/CFT) efforts.

The statement also called for banks to train staff, create dedicated teams to support the digital-asset sector, and proactively engage with new technology-enabled sectors. This approach is intended to strengthen their understanding of emerging sectors and related market developments, whilst avoiding a “wholesale de-risking approach.”

“AIs [authorised institutions] should review their account opening procedures and customer due diligence (CDD) measures,” stated the document signed by HKMA Deputy Chief Executive Arthur Yuen. He also encouraged banks to support the Tiered Account Services initiative and offer Simple Bank Accounts for SMEs and start-ups in need of basic banking services.

In anticipation of Hong Kong’s virtual asset service provider (VASP) license launch by June, the latest guidelines advise financial and banking institutions to support VASPs licensed by the Securities and Futures Commission (SFC). The new framework will require cryptocurrency exchanges and other crypto firms, including decentralised exchanges, to register with the SFC.

HKMA’s advice also highlights that banks should give due regard to “approval in principle” ahead of the new rules coming into force, meaning they should not wait for businesses to receive their VASP license.

As Hong Kong establishes a dedicated regulatory framework and shores up banking support, it is emerging as a hotbed for crypto investment, aiming to be recognised as a Web3 hub.

This move contrasts with the recent crackdown on digital assets in the US, and comes on the heels of news that Chinese state-owned banks like the Bank of Communications and the Bank of China are looking to offer banking services to Hong Kong crypto companies.

The post Hong Kong Urges FSI to Support Crypto Firms With ‘Basic Banking Services’ appeared first on Fintech Hong Kong.

In the Global Financial Centers Index, Singapore was ranked as the top financial centre in Asia and the third globally, while Hong Kong was ranked fourth globally and second in Asia. To revitalise its status as a global financial centre, Hong Kong needs to focus on emerging areas of financial services such as green finance and cryptocurrency. 

Asia’s two financial city-states are at contrasting odds at the moment. Regulators in Singapore have declared sustainability and ESG an important focal area for firms there, while simultaneously restricting cryptocurrency platforms from advertising their services to the general public for various reasons.

The implications have been far-ranging, with some crypto companies reevaluating their customer strategies, some reverting to institutional business models to stay relevant, and regional crypto mainstays like Binance and Luno opting to withdraw their license applications in Singapore altogether

Meanwhile, Hong Kong is still building up its name for sustainable finance, but it is a known crypto-asset hub, with a declared interest in reviving that status as it looks to entice companies (and investors) operating within the Web3 space.

In late February, Hong Kong’s Securities and Futures Commission (SFC) proposed new rules for virtual asset trading platforms, seeking public comment until March 31. The SFC is planning to implement a new licensing regime for crypto service providers from June 1, 2023 and is considering allowing licensed platforms to serve retail investors.

Hong Kong’s advantage in the crypto market

Hong Kong has the potential to become a dominant global hub for cryptocurrencies, given its strategic location and connectivity with mainland China.

However, to achieve this, Hong Kong needs to embrace retail investing in addition to institutional investors. According to CoinDesk, the crypto community is optimistic about Hong Kong’s potential, but uncertainty remains about whether the city will take the necessary steps.

The Special Administrative Region has among the toughest standards for crypto regulations worldwide, as the Securities and Futures Commission (SFC) wants the crypto industry in Hong Kong to be governed by the same compliance standards as applied to traditional financial firms.

Therefore, virtual asset service providers wanting a licence of operation in Hong Kong will have to undergo rigorous anti-money laundering (AML) and investor protection guidelines. Unlike many other jurisdictions, Hong Kong did not face the same level of public scrutiny following the collapse of virtual asset exchange FTX, as regulators elsewhere drew flak for failing to protect retail investors.

So the recent amendments to the island state’s AML and terrorist financing rules make it one of the first territories to subject crypto exchanges and service providers to strict AML and investor protection requirements, which the Hong Kong Monetary Authority is looking into.

In a policy proposal titled ‘Policy Declaration on the Development of Virtual Assets” and published in October 2022, the Hong Kong government outlined a risk-based regulatory framework that seeks to provide a solid foundation for crypto asset regulation while also protecting investor interests.

Hong Kong has a booming number of cryptocurrency users, with nearly half (43%) of the population estimated to have invested or traded in cryptocurrencies, according to a survey conducted by the City University of Hong Kong. The same survey found that Bitcoin was the most popular cryptocurrency among Hong Kong investors, followed by Ethereum and Ripple.

Financial regulations for VASPs in Hong Kong

Hong Kong has been working on improving its regulatory framework for cryptocurrencies and digital assets to be more attractive for a few years now. In 2019, the Securities and Futures Commission (SFC) issued guidelines for virtual asset fund managers and intermediaries. The guidelines set out regulatory standards and requirements for intermediaries involved in the distribution and trading of virtual assets.

To protect investors and maintain the integrity of the financial system, the SFC in Hong Kong has set strict licensing requirements for virtual asset service providers (VASPs) that include cryptocurrency exchanges, custodians, and trading platforms. 

VASPs must maintain adequate financial and operational resources, have transparent internal controls, ensure the security of customer assets, and have measures to prevent money laundering and terrorist financing. VASPs must also appoint a responsible officer who is a Hong Kong resident and holds relevant qualifications or experience in the financial industry.

Speaking at the Hong Kong WOW Summit, crypto venture firm Token Bay Capital founder and SFC Fintech Advisory Group member, Lucy Gazmararian, agreed that while compliance standards for VASPs are set “incredibly high” and might pose issues for the Hong Kong crypto industry in the short term, those measures are in place for a “good reason”.

“The issue is that crypto businesses are often in the startup phase,” she explained. “Many have funding but not huge amounts, not hundreds of millions.”

“To comply with the framework does incur significant costs,” she added, citing the stringent conditions imposed upon VASPs.

Impact on investors

But with Hong Kong’s renewed vision to establish itself as a Web3.0 hub and reestablish itself as a global financial beacon, regulators are seriously considering opening the door to retail investors while maintaining strict compliance requirements. 

The CEO of Hong Kong’s SFC, Julia Leung, even acknowledged that “Cryptocurrency platforms are part of the entire Web 3.0 ecosystem, and we strongly support the development of the entire Internet ecosystem.

But she added that “These virtual currency platforms must protect the safety of all investors from the perspective of investor protection.”

Hong Kong’s latest rules and regulations governing cryptocurrencies, digital assets, and VASPs are a positive step towards greater transparency and protection for investors. The licensed VASPs are subject to strict regulatory requirements, which should reduce the risk of fraud and other illegal activities. Investors will also have access to more transparent and reliable information about VASPs, which should help them make more informed investment decisions.

To maintain its position as a global financial centre, Hong Kong needs to focus on emerging areas of financial services – of which cryptocurrency and virtual assets are the most promising, especially if the ecosystem is opened up to retail investors.

More than 80 companies with interests in digital assets, including foremost crypto exchange Binance and DBS Bank Hong Kong, have expressed interest to apply for crypto licenses once they have a clearer understanding of the framework.

In light of the recent challenges overshadowing the industry, Hong Kong’s rigid rules and proposed guidelines to govern the crypto sphere for institutional and retail investors alike could prove to be a huge advantage.

The post How Hong Kong’s New Crypto Rules Could Renew Its Status As a Financial Hub appeared first on Fintech Hong Kong.

In fact, Hong Kong’s fintech landscape rose from eighth to among the top five in the world between 2020 and 2021, in spite of all the uncertainty. The Chinese special administrative region joins Singapore as the only other Asian territory in the top five, alongside California’s Silicon Valley, New York City, and London.

There are now over 600 fintech startups operating in Hong Kong, and they cover the gamut of financial service and operation innovation, harnessing technologies like AI, blockchain, credit facilities and big data to keep the Hong Kong fintech startups landscape on the cutting edge of commercial fintech applications.

But during the Hong Kong Fintech Week 2022, measures were outlined to solidify Hong Kong as an international cryptocurrency hub, and much was said by the Financial Secretary and the Hong Kong Monetary Authority (HKMA) about the territory’s startups progression in harnessing blockchain protocols to create innovative products and solutions in tandem with Web 3.0 technologies cryptocurrencies, decentralised finance (DeFi), metaverse, NFTs, and stablecoins, among others.

Here we look at five Hong Kong fintech startups with Web3 elements that are on the forefront of harnessing virtual assets in groundbreaking ways, and are transforming the regional fintech sector not just today, but for the future. Two of the biggest brands pushing development in the Web 3 startups space, The Sandbox and its parent Animoca Brands, are not featured in this list as while they have been very active in investing and broadening the portfolio of NFTs and metaverses with fintech applications, they are not primarily fintech startups at their core.

XanPool 

Cross-border payments infrastructure provider, XanPool, is accelerating expansion plans worldwide after raising US$41 million this year from investors led by London-based Target Global.

The company will use the new capital to grow its team, build new features and expand its geographical footprint across Europe, the Middle East, North Africa, and Latin America. The funding will also be used to set up a research and development hub in Thailand which will house the remote software engineers and product developers in a centralised location.

XanPool is one of the leading providers of infrastructure for cross-border payments. The company has built a platform that allows businesses to send and receive payments in multiple currencies. It presently has over 2 million users. 

This cash injection comes on the back of solid growth for the company, founded in 2019 by Jeffrey Liu who was named in the Forbes 30 Under 30 Asia list this year. The firm rode the pandemic era digital commerce boom to connect merchants via the Xanpool platform, as opposed to intermediaries like Visa and Mastercard. Liu says the company’s revenue will likely increase more than threefold this year, and is on course to exceed US$163 million in 2023.

Hex Trust

Hex Trust is a fully licensed, insured digital asset custodian, providing custody, financing, decentralised finance (DeFi), and brokerage solutions not just for digital asset organisations but for financial institutions, corporations, and private clientele.

With a stated vision to secure the ‘permissionless’ future that blockchain technology can empower, Hex Trust is on a mission to provide the most trusted infrastructure in the digital asset economy. Even as the cryptocurrency markets experience adverse tailwinds, Hex Trust has established itself as a fully licensed framework in key strategic locations like Hong Kong and Singapore, complying with the strictest KYC/AML and global regulatory standards so that it can provision core infrastructure backed up by bank-grade technology.

Hex Trust has grown rapidly and over the course of the previous year added numerous high-profile clients to its stable of over 200 clients including Terraform Labs, Tezos Foundation, Animoca Brands, Huobi Asset Management, UnionBank of the Philippines, and Ripple Labs alongside a host of well-known financial institutions – supporting more than 250 coins and tokens in the process.

Not only is Hex Trust well trusted for its wide assortment of digital assets, stringent focus on market-leading tech and security-first, institutional-grade approach to scalability for high transaction volumes, it is also well-funded. Last year it closed its Series B funding round of US$88 million co-led by Animoca Brands and Liberty City Ventures, and featuring a who’s who of Web3 startups and participants including Ripple, Terra, Morgan Creek, Primavera Venture Partners, LeadBlock Partners, BlockFi, CoinList, Protocol Labs, Pulsar Trading, and many others.

The new funding is being used to scale Hex’s licensed custody services to Europe and the Middle East (the firm opened its office in Dubai and obtained regulatory approval to launch operations there as its base in Middle East and North Africa), obtain additional licenses, continue development and innovation, and expand into new business services like financing and structured solutions.

OneDegree

Hong Kong-based virtual insurer OneDegree announced a deal with reinsurer Munich Re last year to offer a new digital asset insurance product that targets digital asset trading platforms, custodians, asset managers and technology providers — making it one of the first fintech startups in Hong Kong to provide coverage for cryptocurrencies and other digital assets.

In fact, since November 2021 OneDegree is one of four licensed digital asset insurers in Hong Kong and the first insurtech in Asia to bring protection for digital assets (offering coverage to the Hong Kong Digital Asset Exchange to the tune of around HK$12.7 million) with its OneInfinity digital insurance product.

Given the intensity and frequency of cyberattacks on the cryptocurrency ecosystem, OneDegree recognised early the importance of implementing risk management solutions for digital assets, bolstering investor confidence amid a deflating market and supporting the development of other Web3 assets.

OneDegree Hong Kong is actively developing further solutions to provide comprehensive protection to digital asset participants, and is presently studying the conditions to insure decentralised finance (DeFi) projects as well as potentially becoming the first in Asia to insure NFTs.

HashKey Group

HashKey Digital Asset Group Limited is unique among fintech startups in Hong Kong, researching and pulling out innovative, community-focused applications to the marketplace. With presences in Hong Kong, Tokyo and Singapore as well as a broad partner-investor ecosystem, the HashKey Group has its virtual hands in a number of pies, offering end-to-end financial services and investment opportunities for startups, including in the Web3 space. 

Amongst other things, the Group most recently launched EPotter, an institutional-grade proof-of-stake liquid validation solution, the first of its kind in Asia. This solution comes on the back of its HashKey Pro digital asset trading platform which also services traditional financial institutions, and HashKey Capital, which is a crypto token fund that has backed several notable blockchain startups such as Terra and Blockfolio.

The company continues to draw attention with its partnership with the Crypto-FinTech Lab of HKUST. The university announced that it would have a digital twin campus in the metaverse called MetaHKUST, which will leverage cryptographic and blockchain-based tech offered by HashKey DID, mainly for privacy security and trustless identity management purposes.

Reap

Reap is a digital payment company based in Hong Kong that has netted US$40 million in a funding round aimed at developing infrastructure to help facilitate payments between Web3 projects, other startups, and traditional businesses. The funding round was led by Acorn Pacific Ventures, Arcadia Funds, and our previous entry HashKey Capital. 

Reap was founded in 2018 by Daren Guo and Kevin Kang, who have payments backgrounds. With a mission to make it easy for anyone to accept or make payments in any currency, the company developed a platform that allows users to make or receive payments in traditional fiat currencies and digital assets. The platform is designed to be simple and easy to use, offering several features that make it convenient for users, including a new corporate credit card with Visa where businesses can manage corporate expenses online.

Blockchain and crypto customers can also repay their credit card balances with stablecoins on the Reap platform, along with other services including expense management and digital payments. Reap will use the latest infusion to fund regional hubs throughout Asia, North American and Europe and to double its team by end-2022.

The company is also working with other crypto startups to build Web3 on-ramps that will allow them to connect with physical merchants and services, targeting a January 2023 launch window.

The post 5 Hong Kong Fintech Startups Making Inroads in Web3 appeared first on Fintech Hong Kong.