Hong Kong FinTech Week kicks off with new Web3 focus: tokenisation and cross-border payments

The annual Hong Kong FinTech Week commenced with a renewed emphasis on Web3, a term that encompasses blockchain, tokenisation, and central bank digital currencies. This focus comes in the wake of the JPEX scandal, which significantly impacted investor confidence in cryptocurrencies and related assets. Despite this setback, Hong Kong officials have reaffirmed their commitment to the development of the Web3 market. This sentiment was echoed by Christopher Hui, the Secretary for Financial Services and the Treasury Bureau, during his opening keynote speech at the conference. Other notable speakers included Hong Kong Chief Executive John Lee Ka-chiu, and Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority.

The overarching theme of the conference was 'fintech redefined', signalling a shift in the way finance and technology intersect. The presence of numerous cryptocurrency companies underscored the continued relevance of Web3, a year after Hong Kong announced its ambition to become a hub for virtual assets. However, the aftermath of the JPEX scandal, which resulted in significant financial losses, prompted a shift in focus. The conference now emphasised tokenisation and cross-border transactions, a departure from the previous year's focus on courting overseas crypto businesses.

Two of the three initiatives proposed by Hui to foster fintech development in Hong Kong involve the expansion of digital yuan and Web3 technologies. The third initiative is a new platform for retail fund distribution from Hong Kong Exchanges and Clearing. During the event, the Securities and Futures Commission released two circulars outlining the requirements for tokenised securities, traditional investment products that utilise distributed ledger technology. These circulars pave the way for retail access to such products, provided they adhere to specific guidelines, including prior consultation with the Securities and Futures Commission and the conduct of smart contract audits.