Government-commissioned research in Hong Kong has pinpointed decentralized finance (DeFi) and metaverse technologies as pivotal avenues to bolster the region’s leadership in global fintech.
The Hong Kong Institute for Monetary and Financial Research (HKIMR), part of the Hong Kong Academy of Finance (AoF), unveiled two comprehensive reports on June 25th. These reports delve into the profound impacts of DeFi and metaverse on the financial sector.
Regarding DeFi, Hong Kong’s report highlighted its meteoric rise, with market capitalization skyrocketing from $6 billion in 2021 to over $80 billion by 2023. The report underscored that DeFi currently represents 4% of the broader crypto-asset market and remains largely untapped, with more than 70% of surveyed crypto businesses yet to explore its potential.
The report acknowledged challenges such as governance, compliance, and security vulnerabilities in DeFi but remained optimistic about its distinctive attributes.
Switching gears to the metaverse, Hong Kong’s research revealed that local financial institutions, despite their keen interest, exhibited moderate engagement levels. This sentiment aligns with the perspectives gathered from Hong Kong respondents.
Interestingly, more than 51% of respondents expressed skepticism about the metaverse’s future potential, including 6% who are directly involved as service providers in the metaverse industry. Nonetheless, a segment of Hong Kong’s fintech sector is actively pursuing developments related to the metaverse.
Enoch Fung, CEO of the AoF and executive director of HKIMR, commented on these findings, underscoring the strategic importance of these emerging technologies for Hong Kong’s financial landscape.