Hong Kong expects continued growth in its fintech ecosystem, with blockchain, digital assets, distributed ledger technology (DLT) and artificial intelligence playing a central role in shaping its future.
Hong Kong is home to more than 1,100 fintech companies, including 175 blockchain application or software companies and 111 digital asset and cryptocurrency companies, marking a 250% and 30% increase since 2022, respectively. according to Government departments responsible for foreign direct investment Investhk’s Hong Kong Fintech Ecosystem Report.
Participants in Hong Kong’s fintech ecosystem. Source: Investhk
Explore a deeper fintech income stream
The widespread growth of the Hong Kong Web3 industry is attributed to proactive government policies and an active licensing system for crypto exchanges or virtual asset trading platforms.
“By 2032, revenue from Hong Kong’s fintech market is expected to reach US$6006 billion, with an annual growth rate of 28.5% from 2024 to 2032,” the report said.
Investhk, along with other Hong Kong authorities, investigated 130 fintech companies operating in Hong Kong and determined that talent shortage was the region’s biggest concern, cited by 58.8% of respondents and then obtained capital (43.9%).
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Addressing these obstacles is crucial to maintaining Hong Kong’s momentum.
More than 73% of surveyed fintech companies operate in AI sub-sectors, far more than 41.5% focus on digital assets and cryptocurrencies.
China’s “one country, two systems” policy is at work
The InvestHK report highlights Hong Kong’s advantages in adopting China’s “one country, two systems” policy, allowing it to maintain a free-market economy, unrestricted capital flows and strong global trade relations while benefiting from mainland China.
As a result, the Hong Kong government was able to launch several Web3 innovations, including licensing systems, on-site Bitcoin (BTC) and ether (ethereth) Exchange trade funds, stable sandbox and tokens for financial and AI integration of Hong Kong Monetary Authority.
The Hong Kong Monetary Authority’s five-step “fintech 2025” strategy. Source: HKMA
In 2021, HKMA unveils strategy Establish yourself as a financial hub by 2025.
The strategy includes encouraging fintech adoption in banks, increasing Hong Kong’s preparation for issuing central bank digital currencies in wholesale and retail levels, thereby enhancing the city’s existing data infrastructure and establishing new currencies, thereby increasing the supply of fintech talent and developing support policies for Hong Kong’s fintech ecosystem.
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