New firms are increasingly dominating Hong Kong’s fintech sector with 40% of new firms launching in the country’s fintech industry last year operating with blockchain and distributed ledger technology (DLT).
It has been reported by Hong Kong’s Financial Services and Treasury Bureau that DLT represents an increasingly dominant share of the country’s new fintech firm’s year-over-year, up from 27% as of 2018.
However, a report published by Hong Kong’s treasury department has provided a detailed snapshot of blockchain’s accelerating growth within the territory.
Blockchain comprises the fastest-growing segment of the territory’s fintech industry, with 22 of the 57 fintech firms, which have launched in Hong Kong over the past year operating with DLT.
As per the report, WealthTech comprised the second-fastest-growing sector with 20% of new fintech firms, followed by Payments with 17%, and InsurTech with 9%.
The report notes that the number of fintech businesses operating in Hong Kong has exceeded 600, including the issuance of eight virtual bank licenses and four virtual insurers since April 2019.
Also, the report finds enterprise DLT solutions to comprise the largest sub-sector of the territory’s blockchain industry by representing 45% of Hong Kong’s distributed ledger firms.
It has been analyzed that trading platforms for cryptocurrencies comprise 27% of Hong Kong’s blockchain sector, followed by digital asset custodians with 14%, and trade finance settlement with 9%.
The report also states that blockchain is among artificial intelligence (AI), big data, and cloud in comprising the stack of technologies underpinning the “tectonic shifts” observed in Hong Kong’s virtual banking sector, as DLT is also being employed in several InsurTech initiatives intended to overhaul and modernize the territory’s insurance industry.
Thus, Hong Kong’s treasury also notes acceleration in the embrace of fintech and blockchain technologies amidst the COVID-19 pandemic highlighting many of the efficiency savings and utilities offered by DLT.