Hong Kong Government Explores DeFi and Metaverse to Boost Fintech Dominance
The Hong Kong government has turned its attention to decentralized finance (DeFi) and metaverse technologies in an effort to strengthen its position in the global fintech landscape.
The Hong Kong Institute for Monetary and Financial Research (HKIMR), the research arm of the Hong Kong Academy of Finance (AoF), recently released two reports that delve into the implications of DeFi and metaverse on the financial sector.
One of the reports pointed out the significant growth of DeFi, which has seen its market capitalization surge from $6 billion in 2021 to over $80 billion in 2023.
Hong Kong’s study on DeFi emphasizes the explosive growth of the ecosystem and asserts that its potential cannot be ignored.
Currently accounting for 4% of the overall crypto-asset market, DeFi remains largely untapped.
The study reveals that more than 70% of crypto businesses participating in the research have yet to explore the potential of DeFi.
While challenges around governance, compliance, and vulnerabilities exist, the study remains optimistic about the unique characteristics of DeFi, such as its ability to provide new financial services with enhanced innovation, automation, and financial inclusion.
Turning to the metaverse, the study highlights a moderate level of engagement among local financial institutions despite their high interest in the technology.
This sentiment aligns with the findings from Hong Kong respondents, with over 51% expressing skepticism about the future potential of the metaverse.
However, a sector of the Hong Kong fintech industry is actively pursuing metaverse-related developments, indicating a growing interest and recognition of its potential.
Hong Kong is eyeing DeFi and the metaverse for fintech expansion!
Government backed
Read more on cryptonews.com
