With the rebound in the price of cryptos (the price of bitcoin has risen from around $4,000 USD in March 2019 to above $11,000 in June) and the recent announcement of Facebook to launch its own crypto-currency Libra, there is a renewed interest in the development of cryptos and blockchains. Association of Blockchain Development (ABCD), together with Broctagon, successfully runs a seminar titled “The State of the Crypto Market” on 5 July 2019 at the Causeway Bay campus of the Manchester Business School. More than 80 people showed up to listen the talks given by a group of industry experts.
In the opening remark and in the panel discussion, Dr. Kyle Wong, the President of ABCD, talks about the continuing adoption of blockchain technology by major corporations. They include the trade finance systems by HSBC and HKMA built on blockchains, HSBC using blockchain for FX settlements and subsequently saving 25% in cost, JPM introducing the JPM stablecoin, LVMH creating a chain for provenance of their luxury goods and SocGen is doing a covered bond offering on blockchain. Kyle believes that to improve blockchain adoption, universities, corporations and regulators need to work closer together to promote the technology.
Ms. Julianne Doe, who is a partner at Dentons Hong Kong LLP as well as the legal advisor to ABCD, first shared about the recent push by the Hong Kong regulatory authorities into Fintech. They include Fast Payment System and the granting of eight virtual bank licenses. However, the regulators are taking a much more cautious approach regarding cryptos. Even though there is a big interest globally in Initial Coin Offering (ICO) or Security Token Offering (STO), the rules in Hong Kong is still not clear. In particular Julianne observed that the intended pathway by the regulators is to fit the trading of crypto products into the existing securities regulation regime, rather than a new and separate regulatory regime.
Another keynote speaker, Mr. Fay Lam, is the CEO of SmartUp, an incubator of blockchain start-ups. Mr. Lam is also a founding member of ABCD. Fay shares about how blockchain technology enables decentralized finance which can potentially disrupt the current financial system. The potential benefits of decentralized finance include helping the unbanked, making cross border payment much cheaper, better privacy & security and making censorship resistant transactions. However, to fully realize the potential of decentralized finance, there are still a few challenges to solve. Currently blockchain still suffer from slow transaction speed and the overall adoption rate of cryptos by the public is still quite low.
Article by: Dr. Kyle Wong
President of Association of Blockchain Development & Project Director of ACH Worldwide Limited