The Hong Kong Monetary Authority (HKMA) announced that it will not issue any more digital bank licenses following its comprehensive review of virtual banks. The review, conducted in 2024, assessed the operations and impact of the eight virtual banks that began operating in 2020. The eight virtual banks currently operating in Hong Kong are Airstar Bank, Ant Bank, Fusion Bank, Livi Bank, Mox Bank, Ping An OneConnect Bank, WeLab Bank, and ZA Bank. The HKMA examined the delivery of policy objectives, market acceptance, business performance, and user response of these banks. The findings showed that virtual banks have met their…

The People’s Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) have signed a Memorandum of Understanding (MOU) to establish a framework for connecting payment systems between mainland China and Hong Kong. The agreement was signed on 2 August by PBOC Deputy Governor Lu Lei and HKMA Deputy Chief Executive Howard Lee. The two officials met to exchange views on a range of topics of mutual interest, including financial cooperation between the Mainland and Hong Kong, as well as pushing forward the linkage of fast payment systems. However, not much detail was provided about the specifics of the…

The Hong Kong Monetary Authority (HKMA) has released the conclusions of its public consultation on the review of the three-tier banking system, which includes proposals for a new two-tier structure requiring a minimum capital of HK$100 million and a minimum deposit size of HK$500,000. The conclusions paper outlines the key comments received, the HKMA’s responses, and the proposed implementation of the new system. The HKMA initiated a three-month public consultation on 26 June 2023, suggesting the merger of deposit-taking companies (DTCs) into restricted license banks (RLBs) over a five-year transition period. This proposal includes applying the current RLB requirements during…

On Tuesday, Hong Kong introduced six spot bitcoin and ether exchange-traded funds (ETFs), marking the first time Asian retail investors can trade these cryptocurrencies at spot prices. The ETFs, issued by China Asset Management, Bosera Asset Management, and Harvest Global Investments, began trading on the Hong Kong exchange. The Hong Kong Securities and Futures Commission (SFC) approved these ETFs two weeks prior. Early trading saw bitcoin ETFs rise over 3 percent, though gains later diminished to about 1.5 percent, while ether ETFs initially gained over 1 percent but fell into negative territory by the afternoon. Hong Kong’s move is notable…

ATFX, a global CFD broker, has been awarded a Type 3 license by the Hong Kong Securities and Futures Commission (SFC). This license, granted to AT Global Financial Services (HK) Limited, enhances ATFX’s ability to serve institutional professional investors in Hong Kong and supports its expansion into the Asian market. “We are thrilled to have been granted the Hong Kong SFC license, a significant milestone for ATFX. This license not only strengthens our commitment to the Hong Kong market but also validates our dedication to the highest regulatory standards and our unwavering focus on providing our institutional professional clients with…

The Securities and Futures Commission (SFC) issued a public warning regarding an entity operating under the name of Proxinex for suspected virtual asset-related fraud. Investors have reported significant difficulties in withdrawing virtual assets from Proxinex, only to be informed that their “accounts did not exist” at all. The SFC also suspects that Proxinex recruited an agent to lure investors into depositing funds via dating apps. This agent may have fabricated documents purportedly issued by a local financial regulator and a financial institution to enhance the agent’s profile. On 29 July 2024, the SFC added Proxinex and its website to the…

The Hong Kong government has appointed Eddie Yue to a second five-year term as Chief Executive of the Hong Kong Monetary Authority (HKMA), commencing in October. Eddie, who has been with the HKMA since its establishment in 1993, will continue to navigate Hong Kong through a complex financial landscape. “I am confident that Eddie will continue to lead the HKMA effectively in the coming five years and make further contributions to Hong Kong’s financial, economic, and social progress,” said Financial Secretary Paul Chan Mo-po, announcing the reappointment. Eddie’s first term coincided with a challenging period marked by rising interest rates…

OneDegree, known for its digital asset insurance solutions under the OneInfinity brand, has expanded its portfolio with a new cyber insurance offering tailored for SMEs. OneInfinity Cyber Insurance provides flexible coverage limits from HK$1 million to HK$4 million, addressing incident response, business interruption, data recovery, cyber extortion, and more. The application process is streamlined, featuring a digital-led approach with under 30 underwriting questions and a real-time cyber risk assessment powered by Cymetrics, allowing eligible SMEs to obtain coverage quickly. A recent global technology outage on 19 July 2024, caused by a faulty update to Microsoft Windows, has underscored the vulnerability…

Invest Hong Kong (InvestHK) has opened applications for the 7th edition of its fintech programme Global Fast Track (GFT) 2024, accepting submissions until 20 September. The programme invites fintech companies from both local and international markets to pitch their ideas on global platforms, offering mentorship and business matchmaking to help unlock their potential. The global finalists of the GFT’s pitching competition will compete in the grand finale at Hong Kong Fintech Week (HKFW). This year’s programme includes new features aimed at strengthening Hong Kong’s position as the premier international fintech hub. King Leung, Global Head of Financial Services, Fintech and…

The financial sector is on the edge of a major transformation powered by continuous technological advancements. At the recent Huawei HiFS Frontier Forum 2024 in Shenzhen, industry leaders discussed how cloud, network, storage, and computing infrastructures can strengthen financial systems’ resilience. The forum’s theme, “Boost Resilience, Reshaping Smarter Finance Together,” encapsulates the industry’s collective ambition to navigate the challenges of an uncertain future through technological excellence and collaborative innovation. This gathering comes at a pivotal moment. Traditional banking boundaries are dissolving, and the definition of financial services is evolving unprecedentedly. The imperative for digital transformation As we hurtle towards 2030,…

Fintech company KPay has integrated HSBC’s PayMe as a new payment method, expanding payment options for merchants and customers. This integration allows the 33,000 merchants in KPay’s Hong Kong network to accept payments from approximately 3.2 million PayMe users. KPay’s merchant app provides real-time transaction data, enabling merchants to understand and monitor their businesses better. Brad Jones, head of PayMe by HSBC, stated that the partnership with KPay will drive financial inclusion in the electronic payment space. KPay, founded three years ago, now serves over 33,000 merchants across Hong Kong, Singapore, and Japan. The company aims to expand its merchant…

Hong Kong’s banking sector has seen significant advances in technology, notably with the emergence of generative artificial intelligence (genAI), transformations in risk management, and the introduction of new environmental, social and governance (ESG) and climate requirements. These developments are highlighted in the latest edition of the Hong Kong Banking Report by KPMG, released earlier this month. Hong Kong’s banks exceed global average in Generative AI adoption The report highlights significant technological progress, particularly the emergence of genAI. The technology is increasingly being used for tasks such as data analysis and employee service through sophisticated chatbots. A survey by Finastra reveals…

ZA Bank announces its role as the first digital bank in Hong Kong to provide reserve banking services for stablecoin issuers. This development follows the Hong Kong Monetary Authority’s (HKMA) recent initiative to open sandboxes for stablecoin issuers, highlighting Hong Kong’s commitment to becoming a leader in the fintech and Web3 ecosystems. ZA Bank has partnered with RD InnoTech Limited, one of the first participants in the HKMA’s sandbox. RD InnoTech will be the first stablecoin issuer to use ZA Bank’s reserve banking services. This partnership aims to enhance the stability and reliability of digital assets, encouraging broader adoption and…

The Hong Kong Monetary Authority (HKMA) is formulating a regulatory regime for stablecoin issuers in Hong Kong, recognising the growing interconnectedness between the traditional financial system and virtual asset markets. As part of this effort, the HKMA has launched a sandbox arrangement to facilitate dialogue between the HKMA and industry stakeholders on the proposed regulatory requirements. The sandbox arrangement allows the HKMA to communicate supervisory expectations and guidance on compliance to entities interested in issuing fiat-referenced stablecoins in Hong Kong. It also provides a platform for participants to share feedback on the proposed regulatory framework. The HKMA has admitted the…

The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) have released the consultation conclusions on the legislative proposal to regulate fiat-referenced stablecoin (FRS) issuers in Hong Kong. This follows a two-month public consultation period, which received 108 submissions from market participants and stakeholders. The majority of respondents supported the introduction of a regulatory regime for FRS issuers aimed at managing potential monetary and financial stability risks and providing transparent safeguards. The proposed regulatory requirements received broad approval, with some suggestions for enhancements. “In addition to the existing regulatory regime for VA trading platforms, the…

The Hong Kong Securities and Futures Commission (SFC) has added seven crypto exchanges to its Alert List for conducting unauthorised activities without the required licenses. This brings the total number of flagged exchanges to 39, with 28 added in 2024 alone. The seven newly identified unlicensed exchanges are Taurusemex, Yomaex, Bitones.org, BTEPRO, CEG, XTCQT, and Bstorest. These exchanges are suspected of engaging in fraudulent activities and compromising investor safety. The SFC has maintained the Alert List since January 2020, cataloguing the region’s licensed and unlicensed crypto exchanges. Earlier this year, the SFC mandated that all crypto exchanges apply for operational…

HashKey Global, a globally licensed digital asset exchange, will launch UXLINK (UXLINK) on its HashKey Launchpool on 15 July 2024. Users can lock their UXLINK and USDT tokens to earn UXLINK rewards over five days, with yield generation starting on 18 July 2024. Participants can earn additional UXLINK by inviting friends. Each investor will receive 100 UXLINK per invitee who joins the launch pool on a first-come, first-served basis. Deposits for UXLINK open on 15 July 2024, with spot trading starting on 18 July 2024 and withdrawals available on 19 July 2024. UXLINK deposits and withdrawals will be conducted via…

Last year, Visa collaborated with HSBC and Hang Seng Bank to pilot tokenisation projects as part of the Hong Kong Monetary Authority (HKMA)’s e-HKD Pilot Programme. In a report, Visa presents collective learnings on these efforts, highlighting the potential value of tokenisation, including higher payment efficiency, reduced settlement risk, enhanced transaction transparency and 24/7 availability. The pilot projects focused on using tokenized deposits, which are digital representation of bank deposits minted on a bank’s blockchain ledger, backed by the institution’s balance sheet. Visa provided technical and engineering expertise for this pilot, including creation of a simulated central bank ledger, while…

The Hong Kong Mortgage Corporation Limited (HKMC) has announced the appointment of Colin Pou Hak Wan as Chief Executive Officer (CEO), effective 26 December 2024. Colin will succeed Raymond LC Li, retiring from the mortgage corporation. Paul Chan, Chairman of the HKMC, expressed gratitude for Raymond’s 11 years of dedication and significant contributions, particularly the successful launch of various new measures benefiting society and the business community. “I look forward to Colin continuing to lead the healthy development of the Corporation after he takes up office, so as to serve the society and business community of Hong Kong,” said Paul…

ZA Bank has introduced its new payroll offer, “Salary+,” effective 1 August 2024. Users receiving their monthly salary via ZA Bank can benefit from a welcome offer of up to 8.8 percent p.a. HKD savings rate without needing a separate payroll account. From now until 31 October 2024, new payroll users who receive their first eligible salary of HK$ 8,000 via their account within 90 days of successful registration will receive a 3.59 percent p.a. HKD savings rate-up coupon. Combined with the current basic interest rate of 0.01 percent p.a., users can enjoy a total of 3.6 percent p.a. HKD…