DeFi
Hong Kong government bizarrely targets Metaverse and DeFi
I thought that Metaverse was dead? I thought institutions and governments didn’t like Challenge? Us too… But apparently, Hong Kong doesn’t.
According to reports from the Hong Kong Academy of Finance (AoF) and the Hong Kong Institute of Monetary and Financial Research (HKIMR), the city is becoming a testing ground for DeFi and the metaverse.
“Emerging DeFi and metaverse technologies, which are closely linked to broader developments in virtual assets and Web3, will likely present various opportunities for the financial services sector in Hong Kong,” said Enoch Fung, CEO of AoF and executive director of the HKIMR.
Don’t knock DeFi
Despite its antithetical stance against centralized finance, DeFi appears to be a hot topic for Hong Kong institutions.
According to HKIMR report titled “Current Decentralized Finance Landscape and Regulatory Developments,” 71% of companies are not yet exploring DeFi, but the 29% that have developed DeFi protocols highlighted their new “ability to facilitate the exchange of small amounts of assets without the need for intermediaries or minimum limits.
Of course, CeFi offers higher liquidity, is more accessible to all levels of customers and has a user-friendly interface.
The report states that DeFi offers businesses greater opportunities in terms of efficiency and cost reduction, access to new financial services, innovation and flexibility, global reach and borderless transactions, transparency and security, financial inclusion, as well as diversification and risk management.
For those already familiar with the concept, the benefits of DeFi are not new, but DeFi has often been at odds with CeFi and has, unsurprisingly, been poorly received by institutions. Regulatory uncertainty, risk management, technical challenges, and complete lack of control are problems presented to old-school institutions by DeFi.
Nonetheless, the report claims that Hong Kong’s strategic location and connectivity to global markets make it an attractive destination for DeFi projects looking to expand in the region.
It further recommends that “DeFi regulation continues to be guided by the guiding principle of ‘same activity, same risk, same regulation'”, with in-depth research being of paramount importance to improve understanding of the risks associated with DeFi developments. Challenge. “.
According to HKIMR report titled “The Metaverse: Opportunities and Challenges for the Financial Services Industry,” 65% of financial institutions surveyed were actively involved in the metaverse.
51% of financial institutions said they have no plans to implement Metaverse applications in their business, but 49% said they have already made or have made relevant investments.
The report argues that financial institutions can use the metaverse to improve interactions with the public, customers and employees, thereby leading to better customer experience and satisfaction.
58% identified the Metaverse as a platform with unique service offerings, while 47% indicated that the Metaverse could serve as a separate marketing channel.
37% of respondents believe the metaverse has the potential to expand their customer base, while 33% believe metaverse applications could improve operational efficiency.
“The metaverse can provide financial institutions with the opportunity to expand their customer base by expanding their global reach beyond physical and geographic boundaries,” the report said.
He also claimed that the Metaverse could enable virtual employee training and virtual workspaces, which could reduce operating costs and provide greater flexibility to employees, potentially increasing work productivity.
However, from the outside, interest in the metaverse seems to be waning. Google trends Data shows that metaverse searches have declined by more than 50% over the past six months.
That said, globally recognized metaverse company The sandbox recently raised $20 million in convertible promissory notes with a valuation cap of $1 billion.
“We are deeply honored by the continued commitment to The Sandbox’s vision, and we are incredibly excited about the future of user-generated composable content games,” said Yat Siuco-founder and executive chairman of the Hong Kong-based company Animoca Brandsowner of The Sandbox.
The Metaverse Is Not So Dead As Sandbox Hits $1 Billion Valuation
Metaverse searches have dropped 50% in the last six months, but The Sandbox managed to raise $20 million at a billion-dollar valuation.
News also broke that Animoca Brands was looking to Go in public in 2025 in Hong Kong or the Middle East. The Web3 giant, valued at $5.9 billion, was delisted from the Australian Securities Exchange following questions about its accounting in March 2020.
The report further claims that Hong Kong is an ideal environment to develop Metaverse technology. 71% of respondents cited Hong Kong’s friendly business environment and low tax rates as crucial factors. 56% highlighted Hong Kong’s strong financial infrastructure and network, while 53% highlighted the importance of a defined regulatory framework and established legal system.
Hong Kong’s unique advantage as the main gateway to mainland China was also another reason given.
“Metaverse survey results revealed that Hong Kong was identified as the main target market for the metaverse strategy by almost half of financial institutions, followed by mainland China (16%), North America and the South (9%) and Asia. -Pacific region excluding mainland China and Hong Kong (7%),” the report concludes.
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