The Hong Kong government announced measures to link fintech to benefit the development of the real economy

Source: The Government of the Hong Kong Special Administrative Region

The Financial Services and the Treasury Bureau (FSTB) today (November 2) announced a series of major initiatives to promote the development of fintech in Hong Kong at Hong Kong FinTech Week 2023. These measures aim to link fintech to the real economy, including the launch of a new integrated fund platform; Welcome the cross-border use of e-CNY to facilitate Mainland visitors and Hong Kong residents travelling to the Mainland; and promoting applications and innovations related to the real economy in the field of virtual assets and Web 3.0, and further improving the regulatory framework.

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The Secretary for Financial Services and the Treasury, Mr Christopher Hui, today (November 2) announced a series of major initiatives to promote the development of fintech in Hong Kong at the main forum of Hong Kong FinTech Week 2023.

The Financial Secretary, Mr Paul Chan, said, "The HKSAR Government has been committed to promoting the development of fintech in Hong Kong, with a view to enhancing the competitiveness of Hong Kong's financial services industry and the real economy, enabling financial institutions to accelerate digitalisation and product innovation, better serve the real economy, and provide more convenient, cheaper and more inclusive financial services to the public. The various policies and measures we have implemented in recent years demonstrate our firm support for the rapid development of the fintech industry."

The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "In line with the theme of this year's Hong Kong FinTech Week, 'A New Definition of FinTech', the FSTB has further announced a comprehensive range of Fintech development initiatives, reflecting our strategic considerations and vision to move the market forward. From the launch of the new comprehensive fund platform to welcoming more e-CNY applications, to promoting real-economy-related applications and innovations in the virtual assets and Web3.0 sectors, these initiatives will benefit the real economy and provide a stronger impetus for the development of our fintech ecosystem."

Launch of a new integrated funds platform

Developed and operated by Hong Kong Exchanges and Clearing Limited (HKEX), the new integrated fund platform is a financial market infrastructure for Hong Kong, targeting the retail fund industry, covering the distribution cycle and value chain from front to back, with a view to better serving investors, fund managers, distributors and other stakeholders in the ecosystem. The Platform will serve as a communications hub, business platform and information portal to strengthen Hong Kong's position as an international asset and wealth management centre.

Welcome the cross-border use of e-CNY for the benefit of Mainland visitors and Hong Kong residents travelling to the Mainland

The FSTB is pleased to note that Octopus Cards Hong Kong Limited (Octopus) and Bank of China (Hong Kong) (BOCHK) will be committed to exploring new e-CNY application scenarios. Earlier this year, Octopus partnered with Bank of China Shenzhen Branch to set up a self-service card issuing machine in Luohu District, Shenzhen, allowing Hong Kong residents to use the Octopus Mobile App to purchase e-CNY hard wallets. In addition, BOCHK has also launched the e-CNY service to facilitate retail merchants in Hong Kong for Mainland tourists to make payments with e-RMB, and to provide a convenient option for Hong Kong customers to top up their e-CNY wallets with their personal bank accounts in Hong Kong.

Subject to regulatory approval and technical readiness, the FSTB welcomes Octopus to take forward the next step in its plan to develop a solution to facilitate the use of e-CNY by Mainland visitors in Hong Kong by allowing them to top up their Octopus cards with e-RMB through the Tourist Mobile App.

Promote applications and innovations related to the real economy in the field of virtual assets and Web 3.0, and further improve the regulatory framework

The government encourages market participants to explore the potential of the underlying technology of Web 3.0 to enable applications and innovations related to the real economy. In this regard, this year's FinTech Week will feature a dedicated session for market participants to share their project and product ideas.

On the regulatory front, to enhance market clarity, the Securities and Futures Commission (SFC) will issue a circular on tokenisation by intermediaries engaging in tokenised securities-related activities and a circular on the tokenisation of SFC-authorized investment products, setting out regulatory expectations from an investor protection perspective. The Government also intends to expand the scope of regulation to cover trading activities outside virtual asset trading platforms. As for the regulatory regime for stablecoin issuers, the FSTB and the Hong Kong Monetary Authority (HKMA) will jointly issue a consultation paper in due course on the legislative proposals to implement the regime. The HKMA is also consulting the banking industry on the relevant guidelines on banks' provision of virtual asset custody services to ensure that customers' assets are adequately protected and the risks involved are properly managed.