Crypto-mania grips Hong Kong as city looks beyond banking
IN THE mid-1990s, Johnson Leung embarked on a career in shipping. In the early 2000s, he moved to finance. And now, he runs a Hong Kong startup that aims to improve how container ships are booked using blockchain technology.
Many in Hong Kong hope the city can make a similar leap. The shipping and banking hub, which has struggled for years to nurture a domestic technology industry, is embracing the blockchain revolution as it looks for new sources of growth.
Sceptics say it’s a risky bet on an unproven technology – one with more than its fair share of hype and, in some cases, fraud. But a growing number of Hong Kong entrepreneurs and policy makers are convinced the online ledger system that underlies crypto- currencies like bitcoin will eventually reshape everything from financial services to supply chains. They say the city’s laissez faire approach toward regulation, along with its expertise in finance and logistics, make it a natural hub for blockchain startups.
“I don’t see why Hong Kong can’t be a leader of blockchain technology,” said Leung, who co-founded 300cubits.tech after more than a decade in the financial industry that included stints as a research analyst at JPMorgan Chase and Jefferies Group.
“It’s so new that it’s not like any country has a huge advantage compared to us.”
Hong Kong’s government has been throwing resources at the technology. The city’s monetary authority is developing its own digital currency and is testing blockchains for trade finance, mortgage applications and echeck tracking. Hong Kong’s securities regulator has joined R3, a global consortium that develops blockchain technology for financial transactions, while a government-backed research institute has worked on a blockchain-based system for tracking property valuations, among other initiatives.
Hong Kong Exchanges & Clearing Ltd., the city’s publiclytraded exchange monopoly, plans to start a blockchain platform for
Traditionally, Hong Kong has been a beacon of economic freedom in the world, and I would love for that to continue to be the case for bitcoin and cryptocurrencies and ICOs. Roger Ver, chief executive officer of Bitcoin.com
early- stage companies and their investors next year.
“Blockchain is a very high priority for us,” said Charles d’Haussy, head of fintech at InvestHK, a government economic development agency.
That doesn’t mean Hong Kong is giving the industry carte blanche. This month, the city’s Securities and Futures Commission told investors to be on the lookout for fraud in initial coin offerings – a form of cryptocurrency fundraising – and warned ICO issuers that they may be subject to local securities laws.
“We have to be very careful with this because on the one hand, we encourage innovation and free markets, but on the other hand, we do have to look after our small investors,” Paul Chan, Hong Kong’s financial secretary, said in a Sept 11 interview. — WP-Bloomberg