A Look at the Blockchain Boost from Hong Kong Monetary Authority (HKMA) and People’s Bank of China (PBoC)

China is making a blockchain push in Hong Kong with new endorsement to develop a partnership with the central bank of HK with blockchain technology as the focal point.

The Hong Kong Monetary Authority in conjunction with InvestHK on (November 6th, 2019) held the City’s leading fintech event. The event was held for five days and many participants from all over the world took part in the occasion. HKMA Chief Executive Mr. Eddie Yue gave the opening remarks in which he observed that the advancement of fintech in Hong Kong had picked up exceptional acceleration after the inaugural FinTech Week which was held in 2016. The HKMA used this occasion to point out a sequence of actions designed to promote a financial technology domain there.

Blockchain Alliance with Institute of Digital Currency of People’s Bank of China (PBoC)

On November 6th, the branches of Hong Kong Interbank Clearing Limited and Institute of Digital Currency of the PBoC put to ink a MOU to orchestrate a Proof-of-Concept (PoC) trial with the purpose of joining together the eTradeConnect1 and the People’s Bank of China Trade Finance Platform.

“Once the connection has successfully been established, it will provide firms in both places with more convenient trade finance services and enable banks in Hong Kong to expedite the expansion of their trade finance business.”

The presupposition is that the PoC will commence in Q1 2020, after achieving the desired result of getting eTradeConnect1 and the PBoC Trade Finance Platform linked.

A Combined Study Between The Bank of Thailand and the LionRock-Inthanon Project

As a continuation with the MOU agreement that was documented, officials for both parties will oversee a joint project for purposes of exploration and analysis that is called Project LionRock-Inthanon to scrutinize the utilization of CBDC’s to cross-border payments, that is geared towards expediting the HKD-THB payment-versus-payment (PvP) between Hong Kong and Thailand banks. A statement from both parties is expected in the first quarter of 2020.

BIS Innovation Hub Hong Kong Centre

The introduction of the Innovation Hub of BIS began in Hong Kong in November 2019, providing the position of Hong Kong’s prominence in the fintech revolution. The HKMA is completely convinced that the Innovation Hub will be at a very principal place for geographical fintech cooperation and initiate the implementation of cutting edge tech for central banks to a degree that has only recently been experienced. At the onset, the HKMA will research with the Honk Kong Centre, the execution of Distributed Ledger in the method and digitalizing trade finance procedures and look into the results of the influence that big technology will have on financial markets.

AI in Financial Institutions

The HKMA has begun through research, an analysis of AI technology in the banking sector and will soon make public several successions of these reports. As a start, the HKMA issued on this very day a template of factual information to call to attention major details and figures that were announced in comprehensive sector assessments that took place in Q3 2019. A major component of the data revealed that about 90% of the retail banks under study have endorsed or are in the process of endorsing AI applications. The study comprised of questions and evaluations as well as surveys carried out with banks, sectorial institutions, and fintech companies, with the purpose of comprehending the prevailing AI scenery in the banking sector and reports will also be released soon in the coming months on their findings.

A Financial Technology Partnership Platform for Acceleration

The HKMA during the fintech week, put into motion a partnership between Fintech Collaboration Platform and Hong Kong Science and Technology Parks to give support for the advancement of financial technology oriented plans. Participants within the industry can benefit from the program to arrange for activities that have a connection to fintech for example accelerators and hackathons to look for original and advanced solutions, recognize people with skills, and find opportunities for partnerships. The HKMA will leverage the platform’s provisions of hardware and software to advance some of its fintech projects and this is inclusive of Project LionRock-Inthanon. Mr. Eddie Yue also stated,

“The HKMA’s fintech initiatives have successfully created a vibrant fintech ecosystem. To lift Hong Kong’s fintech development to a new height, we must take a holistic ‘HK Inc.’ approach. I look forward to working with our partners including financial institutions, end users, start-up firms, technology service providers, investors and regulators to walk towards the shared purposes of driving innovation, enhancing customer experience and facilitating financial inclusion.”

Matthew North
Matthew North
Matthew is a virtual currency specialist based in New Zealand and has written about them since 2017. Matthew hopes to educate the public on the potential of blockchain technologies and how they will disrupt the future of finance.

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