HKMA Launches Initiatives to Drive FinTech Innovation at Hong Kong FinTech Week 2024

Hong Kong FinTech Week 2024

The following is issued on behalf of the Hong Kong Monetary Authority:

The Hong Kong Monetary Authority (HKMA) today (October 28) co-organised Hong Kong FinTech Week 2024 with the InvestHK. The ninth edition of the city's flagship fintech event has attracted global participants to share innovative ideas, exchange fintech experiences and forge valuable business partnerships.

In his opening keynote, The Chief Executive of the HKMA, Mr Eddie Yue, highlighted the importance of embracing the digital frontier to drive the next phase of financial innovation. The HKMA also announced the following initiatives to spearhead the journey of fintech development in Hong Kong:

Accelerating Asset Tokenisation

The HKMA is driving innovation in financial market infrastructure (FMI) with Project Ensemble to accelerate the development of the tokenisation market in Hong Kong. To that end, the HKMA launched the Ensemble Sandbox, which supports tokenisation and CBDC initiatives within the HKMA, to explore tokenisation use cases, initially facilitated by tokenised deposits and central bank digital currencies (CBDC).

Internationally, the HKMA has established new cross-border partnerships with the Central Bank of Brazil and the Bank of Thailand to explore cross-border tokenisation use cases under Project Ensemble. As a founding member of the Linux Foundation Decentralized Trust, the HKMA will also collaborate with other members on interoperability aspects of Distributed Ledger Technology (DLT) financial market infrastructures, embracing open-source technology in the development of the Ensemble Sandbox.

The HKMA has completed the initial phase of six tokenisation use cases (see Annex I) across four main themes under Project Ensemble and will publish a report detailing the results of the experimentation in 2025. The Architecture Community has also added three new members (see Annex II), and four new participants (see Annex III) will begin experimenting with the Ensemble Sandbox on fixed income and investment funds use cases.

Building on the success of the two tokenised government green bond issuances under Project Evergreen, the HKMA is also taking the project to the next phase by introducing a series of measures to promote wider adoption of tokenisation in capital markets. One of these is the Digital Bond Grant Scheme, which will offer a maximum grant of HK$2.5 million for each eligible issuance, aiming to incentivise digital bond issuance in Hong Kong and cultivate the local digital asset ecosystem. The HKMA has consulted the industry and will announce detailed guidelines shortly.

Meanwhile, the HKMA has launched EvergreenHub, a knowledge repository where issuers, investors and other relevant market participants can reference the HKMA's experience and related materials on the technological, legal and operational aspects of digital bond transactions as they navigate bond tokenisation.

Breaking Down Boundaries for Payment

The HKMA is working closely with the People's Bank of China to establish a cross-boundary linkage between Hong Kong's Faster Payment System (FPS) and the Mainland's Internet Banking Payment System (IBPS). This linkage will support 24/7, instant, small-value, cross-boundary remittances using account proxies like mobile numbers. A pilot launch is expected to be around mid-2025 tentatively.

Unlocking Data Potential

The HKMA is driving the digital economy forward with Commercial Data Interchange (CDI), a next-generation data infrastructure that facilitates small- and medium-sized enterprise (SME) lending. To extend its reach, the HKMA is exploring a connection with the Land Registry by leveraging the CDI-CDEG (Note 1)linkage to enhance mortgage and loan assessments for both individuals and corporates in phases from 2025. The HKMA is also exploring pilots on cross-boundary credit referencing with Mainland credit reference platforms to enhance cross-boundary banking service offerings to SMEs.

To diversify data sources and enhance CDI's functions for corporate lending, the HKMA has partnered with the Airport Authority Hong Kong to share cargo logistics data on the Hong Kong International Airport Cargo Data Platform with consent. A proof-of-concept exercise is also underway to upgrade the Commercial Credit Reference Agency (CCRA)(Note 2)2.0, providing analytics insights for a more efficient SME lending journey.

The HKMA has also been actively participating in Project Aperta (Note 3), a cross-jurisdictional collaboration on open finance application programming interfaces (API) network, to reduce frictions and costs in global finance. Initial use cases will focus on trade finance for SMEs.

Empowering Banks to Go Fintech

Fintech Connect, Hong Kong's first cross-sectoral sourcing platform, is launched today to bridge financial institutions with fintech solution providers. This one-stop platform helps promote precise matching of supply and demand for fintech services, fostering collaboration and innovation. The HKMA, in partnership with Qianhai Authority, further enhances the platform by incorporating Qianhai-based fintech solution providers, fostering greater collaboration in the Greater Bay Area, and promoting mutual growth in the fintech ecosystem.

Following the second edition of the FiNETech series in August 2024, at which the Generative Artificial Intelligence Sandbox was launched, the HKMA will continue to work with the ecosystem stakeholders to organise additional FiNETech sessions in the coming months with the aim of further advancing the adoption of GreenTech and DLT.

In addition, the HKMA is introducing a sector-wide uplift programme to enhance banks' monitoring of complex money laundering cases and geopolitical risks through the use of artificial intelligence, supported by a joint event with Cyberport.

Mr Yue said, "As we approach the ninth edition of Hong Kong FinTech Week, the ecosystem has experienced remarkable growth and development in various aspects, with ongoing innovation consistently reshaping the fintech landscape. To further propel the growth of the industry, our financial sector must remain adaptable and open to new opportunities. We are committed to unlocking the full potential and advantage of fintech, and harnessing its power to drive sustainable growth of the ecosystem."

Note 1:Consented Data Exchange Gateway was developed by the Government with the aim of facilitating the interflow of data within the Government with data subject consent obtained.

Note 2: CCRA was launched by the HKMA in 2004 to collect information about the indebtedness and credit history of business enterprises for sharing such with lending institutes.

Note 3:Project Aperta is a collaboration between the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre, the Central Bank of the United Arab Emirates, the Banco Central do Brasil, the Financial Conduct Authority of the United Kingdom, the HKMA, the Global Legal Entity Identifier Foundation, the International Chamber of Commerce Digital Standards Initiative and the Hong Kong University Standard Chartered Foundation FinTech Academy.

Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

HKSARG responds to reauthorization of the so-called Sanctions Provisions under HKHRDA incorporated in National Defense Authorization Act for Fiscal Year 2025

​The Hong Kong Special Administrative Region (HKSAR) Government today (December 26) strongly disapproves of and firmly rejects US' reauthorization of the so-called Sanctions Provisions under the Hong Kong Human Rights and Democracy Act (HKHRDA) incorporated in National Defense Authorization Act for Fiscal Year 2025.

A spokesman for the Government said, "In accordance with international law and international practice based on the Charter of the United Nations, it is each and every sovereign state's inherent right to enact laws safeguarding national security, and it is also an international practice. With at least 21 pieces of laws safeguarding national security, the US has exposed its double standards by pointing the finger at the HKSAR's legal system and enforcement mechanism to safeguard national security."

"The Hong Kong National Security Law (NSL) and the Safeguarding National Security Ordinance (SNSO) also clearly stipulate that human rights shall be respected and protected in safeguarding national security in the HKSAR. The offences endangering national security stipulated by the related Ordinance target acts endangering national security with precision, and define the elements and penalties of the offences with clarity, aiming at addressing, combating, deterring and preventing acts and activities of endangering national security. It targets only an extremely small minority of people without affecting the basic rights and freedoms lawfully enjoyed by Hong Kong residents."

He said, "The US openly clamour for so-called 'sanctions' with an aim to intimidate HKSAR officials who resolutely safeguard national security. The HKSAR Government strongly condemns its political grandstanding rife with ill intentions, which have been seen through by all. The HKSAR despises the so-called 'sanctions' and will not be intimidated by such a despicable behaviour. The HKSAR will resolutely continue to discharge the duty of safeguarding national security."

The HKSAR Government has been enforcing the sanctions imposed by the United Nations Security Council (UNSC) fully and vigorously to fulfil our international obligations. We have long been maintaining an effective mechanism for implementing the resolutions of the UNSC. That includes denying entry of vessels designated by the UNSC as well as suspicious vessels, keeping a close watch on and inspecting suspicious Hong Kong-based companies to prevent them from participating in activities evading UNSC sanctions. At the same time, the HKSAR Government has been implementing a comprehensive and robust control regime over the import and export of strategic commodities and maintaining active participation in the Chemical Weapons Convention and the Arms Trade Treaty through the Central People's Government. The effectiveness of our work has been well respected and recognised by our trading partners and internationally.

The US has substantial economic interest in Hong Kong. Over the past decade, it registered a trade surplus of about US$270 billion with Hong Kong. Currently, some 1 390 US companies operate in Hong Kong. If the US insists on its acts, it will ultimately undermine the mutually beneficial relations between Hong Kong and the US, harming the interests of the US and its companies.

The spokesman reiterated that foreign governments and legislatures should not interfere in any form in the internal affairs of the HKSAR.