Shaping the future with blockchain

Despite heavy rain, the latest China Daily Asia Leadership Roundtable, co-organized by China Daily and the University of Hong Kong’s School of Professional and Continuing Education (HKU Space) Executive Academy, drew a full room of attendees.

Held at the HKU Space Admiralty Learning Centre, a diverse group of speakers, academics and industry leaders gathered for the latest roundtable, themed “Blockchain: Shaping the Future of Business”, which highlighted the opportunities this increasingly influential technology has continued to generate.

Ashwani Goel, general manager at Tata International, said he came to the event “as a student”.

“I’m interested in learning more about blockchain and utilizing it in the trading of physical commodities. This China Daily Asia Leadership Roundtable seems like a good place to learn more,” said Goel.

And, those who spoke were too ready to paint a picture of the situation for the participants and audience.

Zhou Li, editorial board member of the China Daily Group and publisher and editor-in-chief of China Daily Asia Pacific, pointed to the Chinese mainland’s advances in fintech as a sign that it’s ready to harness the benefits of blockchain technology.

“China’s growing influence in the digital economy has seen even the citizens of its second- and third-tier cities use fintech in the wet market. Blockchain is the technology that can take these cashless transactions to the next level in future,” said Li.

“From money to music, many things can now be stored, transacted and managed without an intermediary. People everywhere can trust each other and have peer-to-peer transactions,” he added.

N.R. Liu, deputy director (Business and China) at HKU Space and principal of the HKU Space Executive Academy, brought attention to Hong Kong’s role in the regional consideration of these developments.

“Hong Kong is now at a crossroads. It has a history of developing a village into a global financial center and helping China in many ways,” said Liu. This could prove to be the sector that will help Hong Kong repeat its historic rise.

“In the financial sector, there’re lots of things emerging in the area of fintech, especially with regard to blockchain. The question is how we can use blockchain to help the financial sector and system,” he said.

The panel of speakers at the roundtable had strong views of the transformative effects of blockchain technology, including the role and responsibilities of financial institutions.

“For banks, the core mission of being a treasurer will remain unchanged, but its operating model will be transformed. Day-to-day transactions will become a small part of the operations. More of the focus will lie in managing drivers and addressing business risks,” said David W.Y. Koh, regional head of transaction banking for Greater China and North Asia at Standard Chartered Bank (Hong Kong).

“Treasury activities are ripe for digitization and once routine tasks are automated, we can focus on creating value-added analytics and services.”

Koh conceded that banks have been slow in adopting blockchain, but stressed that it’s important for them to keep up.

“We may not lead the race, but it’s important to keep pace,” he said.

On the other side of the (bit)coin, blockchain is expected to play a big part in facilitating financial inclusion.

Alex Kong, founder and chairman of TNG FinTech Group, has developed the TNGeWallet to help the unbanked access financial services.

“Holding an eWallet is like carrying a global mini bank in your palm,” said Kong, a serial entrepreneur who’s experienced in technology and business solutions.

“However, the issue is that many eWallets do not work with others. We want to facilitate frictionless global money transfers, which is what the unbanked needs. Blockchain can help with matters like e-KYC (know your customer), credit scoring and smart contracts.”

Phang Yew Kiat, vice-chairman and chief executive officer of Chong Sing Holdings FinTech Group -- a Hong Kong-listed company that provides intelligent financial lifestyle services -- has invested more than $100 million in blockchain in the past three years.

“If the internet is equivalent to info highway without memory, then blockchain is internet information with immutable transaction record,” said Phang.

“But, the things that keep me awake are the challenges in the coming months and years. There are still not enough government regulations and endorsement; no one standard in the technology supporting blockchain today and in the future; a lack of definitions that could lead to misinterpretations; and not enough talents and qualifications.”

Other worrying issues include the rise of cryptocurrencies and the possible displacement of traditional hubs of finance.

“There are around 1,889 cryptocurrrencies as of August 24. A lot of it has been pump-and-dump scams,” said Pindar Wong, chairman of VeriFi (Hong Kong) -- an internet financial infrastructure consultancy -- and head of the Belt and Road Blockchain Consortium.

“Hong Kong is the consummate middle person. What happens when that role disappears. How would it be affected?” he asked.

He said the answer may lie in the Belt and Road Initiative.

“Islamic finance and green finance might be where the next opportunities lie. One-third of the countries along the Belt and Road would require Shariah-compliant smart contracts, which is what blockchain can deliver. And, of course, environmental financing is needed by all,” Wong said.

He urged Hong Kong to seriously consider using blockchain to solve the issue.

“With the rebalancing of trade in the trade war, everyone requires tech that can account for the new flows of trade. Whoever solves the problem will help shape the future of business and trade,” said Wong.

“The Belt and Road is the answer and Hong Kong has a role in dealing with the intangibles. With the verification benefits of blockchain, it also simplifies a geopolitical discussion.”

Members of the audience were on the same page.

Bruce Cheung, acting head of HKU Space’s College of Life Sciences and Technology, believes it’s important for Hong Kong to pick up on blockchain technology to be the “digital gateway” to China.

“Hong Kong can act as the data storage hub for both international and Chinese businesses. It’s important for Hong Kong to learn how to fully harness and utilise the power of blockchain technology to be at the forefront of this revolution,” he said.

“Blockchain is truly shaping the future of business and countries like the UK have invested heavily in it. Hong Kong has been a bit slow in adopting it despite a lot of discussions. But, we need to step it up,” he added.