Hong Kong Government Budget: Encourages exploration of blockchain technology applications in the financial industry

Baozou Comment : The Hong Kong government has always maintained a very tolerant attitude towards blockchain technology. Moreover, it has always maintained a close attention, especially since it has a relatively good location and may be able to play a greater role. The Commonwealth Bank of Australia has also moved their blockchain laboratory to Hong Kong, also because of the excellent location of Hong Kong. As for the policy encouragement, I hope that many local governments in China can also learn from it.

In recent months, we have seen governments, financial institutions and commercial organizations around the world publish research reports on blockchain technology. Recently, the Hong Kong government’s government budget (belonging to the 2016-2017 fiscal year) in the "New Economic Order" chapter specifically mentioned blockchain technology in the section on financial technology.

The Hong Kong government's budget speech stated

“The Government will encourage the industry and relevant institutions to explore the application of blockchain technology in the financial industry and develop its potential to reduce suspicious transactions and lower transaction costs. Cyberport will provide training to the industry through incubation programmes, promote relevant technologies and develop more services and products.”

The Hong Kong government is the first government in the world to explicitly mention blockchain technology in its fiscal budget. As one of the most important financial centers in Asia and even the world, Hong Kong has always maintained a high level of attention in financial technology. As one of the important technologies with the potential to reshape the next generation of financial system, blockchain technology has attracted the attention of many heavyweight institutions.

In addition, the budget also mentions the following:

"Fintech brings a new financial management experience to consumers and improves the operational efficiency of financial institutions by using technologies such as mobile communications and artificial intelligence. Financial service providers are no longer limited to traditional financial institutions such as banks and insurance companies. Telecommunications companies, e-commerce companies and start-ups can all provide financial services to individuals and businesses through the Internet and mobile technology."

Fintech has a wide range of applications, including electronic payments, robo-advisors, financial product distribution, big data analytics, cybersecurity, equity crowdfunding and peer-to-peer lending. Some studies estimate that global investment in fintech will increase from US$12 billion in 2014 to more than US$46 billion in 2020.

As a new technology in the field of FinTech, blockchain technology is conducive to improving the efficiency of financial institutions and reducing operating costs. The Hong Kong government's support and encouragement for this technology shows that the potential of blockchain technology in the financial system is immeasurable.