DeFi and Metaverse Identified as Growth Areas for Hong Kong's Fintech Industry
Summary:
Decentralized finance (DeFi) and metaverse technologies have been highlighted as growth opportunities for Hong Kong in the global fintech industry in two studies backed by the Hong Kong Government. The reports, released by the Hong Kong Institute for Monetary and Financial Research, discuss how these sectors could influence the financial industry. The studies showed the DeFi market grew from $6 billion in 2021 to an estimated $80 billion by 2023, demonstrating the sector's untapped potential. Also noted was a moderate level of involvement with the metaverse among Hong Kong financial institutions, despite their high interest.
Two independent research papers backed by the Hong Kong Government have spotlighted decentralized finance (DeFi) and metaverse technologies as potential avenues for bolstering Hong Kong's leading position within the international fintech market. These papers were published on June 25 by the Hong Kong Institute for Monetary and Financial Research (HKIMR), which is the research division of the Hong Kong Academy of Finance (AoF). Each paper explores the impact of the DeFi and metaverse sectors on the world of finance.
The Hong Kong paper on DeFi underlines the dramatic expansion of this marketplace, growing from a mere $6 billion in 2021 to an expected $80 billion by 2023. The report emphasized the indisputable potential of DeFi, illustrated by these staggering figures.
Although DeFi only makes up 4% of the total crypto-asset market, the majority of this market has not been explored as yet. Data shows that over 70% of surveyed crypto businesses have not yet delved into this technology.
The same report also addressed existing issues in the DeFi sector, such as governance, compliance, and certain vulnerabilities, but mainly underscored the unique potential of DeFi: offering new financial products like liquid staking, flash loans, and automated market makers while improving transaction speed, innovation, and financial inclusivity.
In terms of the metaverse, Hong Kong's report shows that despite a high level of interest, local finance institutions show a moderate level of interaction within this space. This sentiment is reflected among Hong Kong survey participants as well.
The paper reveals that over half of the respondents were skeptical about the metaverse's future, including 6% who were metaverse service providers. That said, some of Hong Kong's fintech firms are actively engaging in metaverse-related ventures.
Enoch Fung, the CEO of the AoF and executive director of the HKIMR, commented on the potential of these emerging technologies, noting that DeFi and the metaverse, as major contributors to virtual asset and Web3 trends, could offer numerous opportunities to Hong Kong's financial services industry.
Published At
6/26/2024 11:57:58 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.