Blockchain Ranked Largest Fintech Sector in Hong Kong
Blockchain or DLT (distributed ledger technology) firms have been dominating Hong Kong’s startup sector. Last year, enterprise DLT and crypto-assets exchanges were rated the most popular sectors in Hong Kong’s Fintech industry. According to a report from the Financial Services and Treasury Bureau which unveiled that blockchain startups considered for approximately 40% of the 57 Fintech firms that built operations in Hong Kong in 2019.
The rise in DLT-focused companies has come after the Special Administrative Region of the People’s Republic of China (HKSAR). It decided to interject new policies that intend to make blockchain technology development a fundamental focus area or priority. The report verified that enterprise blockchain firms were the most popular, as 45% of new companies are focused on producing applications for large businesses. Digital currency trading platforms considered for 27% of all blockchain-related firms in Hong Kong.
Cryptocurrency custodians and trade finance firms accounted for 14% and 9% of the region’s blockchain startups, individually. Only 5% of the firms are contemplating launching security tokens, the report unveiled. Blockchain or DLT-focused companies now estimate for a much larger share of Hong Kong’s Fintech startup sector. They only served 28% of the region’s financial technology industry back in 2018. This important growth may be connected to the (generally) positive approach that the region’s government has taken towards blockchain initiatives.
Compared to most other jurisdictions, Hong Kong appears to have offered clearer regulatory guidelines for blockchain-related businesses. Blockchain professionals have qualified for bonus marks or incentives when implementing for Hong Kong’s Quality Migrant Admission Scheme (QMAS). The QMAS is a program that allows applicants to settle down in the city before having to look for employment. This has reportedly motivated numerous blockchain specialists to move to Hong Kong.
In 2019, Fidelity strategically funded $14 million in the city’s BC Technology Group, which operates a cryptocurrency trading desk. Hong Kong’s government associated with Thailand’s officials in November 2019 to investigate the development of central bank digital currencies (CBDCs).