It’s a good time to be involved in digital assets in Hong Kong. In the territory’s 2016-17 budget, Financial Secretary John Tsang laid out a plan for the government to support blockchain technology development by encouraging its application in financial services, including reducing suspicious transactions and bringing down transaction costs.
The 2016-17 budget aims to support 150 fintech startups over the next five years in Hong Kong Island’s Cyberport, and arrange for 300 students to train in fintech overseas. It will also provide training for the financial services industry in blockchain matters and promote relevant technologies to develop products and services.
As Hong Kong’s government takes positive steps to foster blockchain technology and wider fintech incubation, Bitcoin Magazinespoke to ANX International’s CEO Ken Lo to get his perspective on the benefits to adopting blockchain technology and recent developments in Hong Kong.
ANX International is at the center of the innovation in Hong Kong’s digital assets ecosystem, offering a one-stop shop for blockchain development. As well as carrying out coin development, building white label trading platforms in primary and secondary markets, and integrating digital currencies into debit cards, ANX is pioneering the use of the blockchain in compliance.
While the regulators are proactively encouraging blockchain technology, do you feel that banks and financial services firms are sufficiently aware of the cost savings available from adopting this technology?
Blockchain is still very new and perceived as risky by many banks and financial services firms. In the past year, these institutions have done their research and are now aware of the benefits of blockchain technology.
This is really where ANX excels, as we have been helping companies realize and implement the benefits of blockchain technology for over two years now. We are the only one-stop shop for institutions and businesses to be able to get advisory, systems integration and managed services in blockchain technology today. We provide our software as a service (SaaS) platform globally, so businesses can get on board with blockchain technology in less than 10 days. We provide the digital assets, exchange platform and managed services so the businesses don't have to invest any capex [capital expenditures] to integrate our services.
Businesses integrating such services will benefit, but what are the practical benefits of wider adoption and integration of digital assets into exchanges for the industry as a whole?
Exchanges can help with the liquidity and integration of blockchain digital assets into traditional networks. The more points of presence the easier it is for the adoption and realization of benefits such as convenience for users.
Hong Kong’s government has recognised the importance of blockchain in financial services, including in reducing suspicious transactions and transaction costs. How could blockchain influence the way financial institutions comply with anti-money laundering (AML), know your customer (KYC) and other regulations?
Blockchain is an excellent platform that can support AML and KYC with its built-in encryption of transactions that is tamper-proof. Applications built on top of the blockchain can be assured of its integrity. With such a secure and transparent platform, all transactions can be traced and matched with identifiable origins.
The 2016-17 budget aims to step up blockchain innovation, fintech and startup incubation. Given Hong Kong’s historically low research and development spending, do you feel this goes far enough?
There is always room for improvement. Hong Kong is taking the steps in the right direction on what it needs to do in order to stay competitive and retain the financial capital status. John Tsang's initiatives mentioned in the 2016-17 budget speech will surely be a boost for Hong Kong.