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How to Leverage FinTech Opportunities in Africa

Over 50 financial and blockchain professionals gathered at “Financial Inclusion and FinTech Adoption in Emerging Markets” for the latest fintech development of Africa held in Eaton Club, Central.

The event commenced with the sharing of Elliott Hoffman, Growth Specialist of Paxful on the adoption of M-Pesa in Kenya and Paxful’s educational efforts to students in Africa. This is followed by the opening keynote of Madoda Ntshinga of the South African Consulate-General in Hong Kong. Madoda mentioned that unbanked people account for around 60% of total African population, which has enormous potential in mobile money adoption. He pointed out that South Africa, Kenya and Nigeria are the 3 countries driving fintech adoption in Africa.

Ray Youssef, CEO of Paxful explained how Paxful reached the African market with challenges involved. While Africa is Paxful’s largest market which account for 45% of the customer base, strict control of monetary system by the governor and education to the Africans are some of the key challenges driving BTC adoption. For example, the monetary system of countries like Ivory Coast and Burkina Faso are under strict control by France. The educational effort for Africans is challenging too as people initially believed Bitcoin and Bitcoin mining are full of scams. To overcome the educational challenges, Paxful set up campus tour in 2019 and explained the benefits of peer-to-peer finance to the Africans.

7 Use cases highlighted by Ray

Ray also highlighted that wealth preservation is one of the most important use cases especially in high inflationary African countries.

Ray’s keynote is followed by the panel discussion “Financial Inclusion and New Technologies in Africa”.

Moderator and panelist (From left to right): Musheer Ahmed of FinTech Association of Hong Kong, Duke Malan of Africa Works Ventures, Ray Youssef of Paxful, Karena Belin of Whub, Rajkumar Kanagasingam of Fintech Association of Sri Lanka

Moderator: Musheer Ahmed, General Manager of FinTech Association of Hong Kong

Panelists:

1) Duke Malan, Partner of Africa Works Ventures

2) Ray Youssef, CEO of Paxful

3) Karena Belin, CEO & Co-Founder of WHub

4) Rajkumar Kanagasingam, President of Fintech Association of Sri Lanka

In relation to tech adoption rate, Karena pointed out that China has a high rate of 60% while South Africa is only 16%. This presents huge room for growth across African countries. Duke believed that technological inclusion takes time due to structural problem, which tech literacy can be improved by hosting coding camps.

In terms of challenges in financial inclusion, Ray pointed out that there are around 40-50 mn unbanked population in the U.S., which some of them prefer using gift cards instead of bank accounts for payments. He also mentioned that localized process is needed to facilitate financial inclusion for each country. For example, eKYC would not work for Kenya as most Kenyans do not have address proof.

In terms of opportunities in Africa, Duke believed that education, credit rating infrastructure and agriculture markets have huge growth potential going forward. Ray highlighted that Africa presents huge arbitrage opportunities with huge presence of asymmetric information across countries. Karena believed asset tokenization in artwork and payment presents huge fintech opportunities in Africa.

The panel discussion is followed by the keynote by Douglas Arner, Kerry Holdings Professor in Law at University of Hong Kong. Douglas first shared with us some insightful stats in Africa: while 75% of Africans have sim card, only 45% of total pay mobile subscription. The smartphone penetration in Africa is about 35% and it is estimated that there will be 300 mn mobile ownership growth by 2025. In telecom market, the revenue stream is switching from mobile subscription to data and apps.

Douglas then highlighted 17 use cases for financial inclusion. Talking about insurance, he pointed out that modelling risk and climate change risk are the key risks for reinsurers.

The event ended with engaging networking sessions and fine South African wines. More importantly, we have conducted an exclusive interview with Ray Youssef, CEO of Paxful on his personal story and latest development of Paxful.

The full interview is coming up soon, stay tuned!

Exclusive: Lack of Interdisciplinarity – Culprit for FinTech Talent Shortage

Exclusive interview with Prof. Aris Stouraitis: Part 1

In FinTech, the talent shortage is always a pain point in Hong Kong. It is our pleasure to discuss with Professor Aris Stouraitis, Department Head of Finance & Decision Sciences at Hong Kong Baptist University, to share with us the culprit of FinTech talent shortage. He also highlights how financial institutions, governments, and academic institutions can address this problem.

From a corporate finance background with publications related to corporate governance and related party transactions, what made you switch from corporate finance to the FinTech field? Are there any publications on FinTech you are currently working on?

I have not changed fields, and I am currently still in corporate finance and corporate governance as before. However, I realized that as a department head, I need to be actively involved in FinTech because this is important for the future. I want to work on the new development of FinTech and artificial intelligence, such as the interplay between AI and corporate governance, or new technologies, and corporate governance.

The FinTech talent shortage has been a common issue globally. What is the reason behind it, and how can financial institutions and the government address such a shortage?

In general, what is lacking currently is interdisciplinarity. People who traditionally study and understand FinTech comes from a computer science background. They are not very proficient in finance, and they do not understand how the economy works. People with financial backgrounds do not understand the technical side. I think a lack of interdisciplinary for people working in the field is the main issue for talent shortage. However, this situation is getting improved because we are starting to offer interdisciplinary programs, and this issue will be gradually solved.

I believe most financial institutions are now doing in-house FinTech training as there is a lack of programs at universities.

The government is promoting FinTech in 2 ways:

1) At the industry level to attract more FinTech companies to come to Hong Kong;

2) Encouraging universities to start developing more FinTech programs and more FinTech research.

I think these FinTech programs and research will become increasingly interdisciplinary.

The government can do more by helping us attract more FinTech talent in Hong Kong at the university level. To be honest, the universities in Hong Kong just started to look into FinTech development. If the government injects more funding to academic institutions, we can attract more talents worldwide to work in the FinTech industry in Hong Kong.

What about academic institutions? How can the government help them to foster FinTech adoption?

I think the best way to foster FinTech adoption is attracting foreign talents; by doing so, we need funding from the government.

Academic institutions are launching new programs at a very fast pace. The government can provide funding for FinTech research. However, the impact will be limited because we do not have talents who have had experience in FinTech research.

Research funding is not a problem in Hong Kong, and I believe talent attraction is a more difficult task. If we have one or two FinTech programs, this can accommodate a certain number of faculty members. We need more funding when there are more FinTech programs in the future

Exclusive: What are Top 5 FinTech Career Advice for Graduates?

In Part 1 of the interview, Prof. Aris Stouraitis identified lack of interdisciplinarity is the culprit of FinTech talent shortage in Hong Kong. Interdisciplinarity in FinTech refers to talents that are knowledgeable in both finance and technology. He presents how the Master of Science in Finance (FinTech and Financial Analytics) (“the program”) offered by Hong Kong Baptist University (“HKBU”) strives to nurture interdisciplinary talents, and he provides the top 5 career advice for graduates who wish to work in FinTech and blockchain industry!

We’ve noticed that the FinTech program by HKBU has one elective course in blockchain and cryptocurrency. Which area of topics will be covered in this elective course, and what are the learning outcomes?

The elective course of blockchain and cryptocurrency includes but not limited to the following areas:

1) Foundation of blockchain in both technical and non-technical perspective;

2) Rationale and applications of smart contracts and decentralized autonomous applications;

3) The origin of Bitcoin and other cryptocurrencies;

4) Various use cases in blockchain applications;

5) Security in blockchain and the importance of cybersecurity.

For our students, there are four learning outcomes for this elective:

1) The ability to explain and the concept of blockchain and what promises blockchain technology provides;

2) The ability to explain how blockchain technology has transformed different industries;

3) How students can apply the knowledge to address the risks and challenges of businesses adopting blockchain technology;

4) How blockchain technology is applied in the finance industry in the future.

What is the practical assessment provided by this program? Because if the program is practical, it will help the graduates a lot in pursuing a career in the blockchain industry.

First of all, the program is interdisciplinary. Our teaching staffs come from the finance or computer science field. We have many adjunct professors who are well-known industry practitioners. They tend to have computer science backgrounds.

There’s a lot of interdisciplinarity in the program. Apart from academics, our industry practitioners have a better understanding of the daily blockchain applications and what are the applications and challenges that businesses face. Meanwhile, we are trying to provide internships for our students. They should be able to take an internship while they’re studying the program and thus get some practical experience. Therefore, our program is focused on interdisciplinarity and employability. It’s a more practical program rather than only abstract theories.

It’s very interesting to know that cybersecurity and privacy is one of the core curriculums of the program. What is the significance of cybersecurity and privacy in fostering FinTech development?

I think that cybersecurity and privacy are the core of FinTech and any IT applications.

Cybersecurity is going to be critical in FinTech. Take mobile banking as an example. If you are using mobile banking, you want to make sure that the transactions are secure. The demand for cybersecurity will increase when there is more online transactions in the future.

For privacy, it becomes increasingly important when corporates like Facebook access to a large amount of user’s data. How Facebook is going to use the data becomes the critical privacy issue for users. I think cybersecurity and privacy are gaining attention, and no one was paying too much attention to privacy before. Both governments and individuals start looking at privacy much more seriously.

There are more universities launching their FinTech program since 2018. How do you evaluate the program in HKBU against others like HKUST?

The universities in Hong Kong are setting up FinTech programs independently. I think in future, there may be more convergence of FinTech programs, or some universities may look for a particular niche within FinTech.

Our program focuses more on employability. We think that the majority of our graduates want to find a job after graduation instead of studying for a Ph.D. It’s both practical and theoretical as we have academics from the interdisciplinary background and industry practitioners in the program. Some of our courses provide internships for our students to gain practical experience. The core focuses are employability and practical applications.

We know FinTech is a fast-changing domain. How does the program keep up with the fast-changing pace in the industry?

Our programs will be updated continuously in the future.

This is very important because, with a traditional program like corporate finance, you set up the program, and then the structure remains unchanged for the next 15 years.

This is not the case for FinTech. There is a need for these programs to be updated continuously. We just launch the program now, and I expect that we will update the program on an annual basis. With the fast-changing pace in FinTech, we need to review the curriculum, course offerings, and structure regularly.

We also keep abreast of FinTech development from our industry practitioners. We attend a lot of industry meetings and the practitioners are well aware of FinTech development. They also provide valuable feedback for us to update the program continuously.

What is your career advice to graduates who wish to work in the blockchain industry or FinTech?

The opportunities in FinTech are going to be very exciting. For instance, we will have new virtual banks in Hong Kong, and they are looking for talents in this area. I have the top 5 career advice for graduates:

1) Pay attention to interdisciplinarity

We need to be able to understand both the technical and financial sides. If you understand only one of the two, you will not be as competent as the others.

2) Keep abreast of changes in regulation and compliance

Compliance is very important in the banking industry nowadays. All FinTech applications will have to comply with regulations. I think graduates need to be well aware of the regulations in their field of FinTech and how things are changing.

3) Learn more on cybersecurity and privacy

I predict there will be surging demand on cybersecurity talents going forward. You need to keep abreast of the knowledge in cybersecurity and privacy.

4) Beware of ethical considerations

I believe that new FinTech applications are presenting ethical considerations which are not well understood currently. However, ethical considerations will be more important in the future. Let’s say we develop algorithms on algorithmic trading. For me, I don’t purchase tobacco stocks because I think it’s unethical. Do you train your algorithms not to purchase tobacco stocks or not to trade in a particular industry?

5) Open to entrepreneurial opportunities

In the past, graduates worked in investment banks after their studies. With Fintech, people can develop their own applications and start their own companies! Be open to such opportunities and get prepared!

Australian Securities Exchange Partners with VMware to Go Blockchain in 2021

Applying Blockchain to CHESS, the Australian Securities Exchange (ASX) will use blockchain for its registry, settlement and clearing system by 2021.

A recent press release shows a new agreement with the NYSE listed companies namely VMware and Digital Asset holding and the ASX for the replacement of the CHESS system by 2021. The three-party memorandum of understanding (MoU) with these companies will merge blockchain projects in Australasia and equally the coordination to restore the equities clearing and settlement.

Additionally, the MoU consists of supporting the open-source smart contract, especially the programming language called DAML (partially owned by the ASX).

In 2017, we saw the disclosure for the blockchain replacement of the CHESS system with clear efficiencies such as quicker transaction, decreasing costs and heightened security. The process has experienced delays in terms of implementation as it requires lengthy periods for user development and testing. The first implementation in early May 2017 exhibited the first code app on the new platform called the “Customer Development Environment.”

The ASX deputy confirms the alignment of this new partnership with the company’s beliefs as well as its commitment to delivering the distributed ledger technology, on track to replace the CHESS replacement system.

Image via Shutterstock

Ethereum Network Planned Hard Fork Delayed Due to Late Acceptance of EIPS

The blockchain infrastructure company running the core of the Ethereum network has delayed the planned hard fork launch until September 6th. 

During the dev meeting, Pooja Ranjan, founder of Etherworld presented meeting notes which suggested that, in accordance with the Parity core developer, Wei Tang, there is bound to be a two-week delay before any proceeding in selecting the block numbers with regards to the Istanbul fork.

Wei expressed concerns over gas issues which would require immediate resolving prior to launching or implementing the mainnet hardfork, as it could result in complications in changing the course once the fork occurs. This could result in the delay past September 6, Wei argued.  

Not to mention, Buterin of Ethereum has previously highlighted that the Ethereum blockchain itself is reaching full capacity.

Buterin stated:

“Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will not only be fuller, but we will be competing with everyone for transaction space”

Image via Shutterstock

Hong Kong Science and Technology Park: Turning Tech Startups' Visions into Reality

In October 2018, Hong Kong Science and Technology Parks Corporation (HKSTP) announced a wide array of new initiatives, enhanced programs and support services aimed at strengthening and accelerating the growth of Hong Kong’s Innovation and Technology (I&T) sector and startups.

To support its key strategy of grooming promising technology startups—HKSTP operates effective startup incubation programs to turn innovative ideas into marketable products and solutions.

Blockchain.News sat down with Peter Mok, Head of Incubation and Acceleration Programmes, HKSTP to gain further insight into the Incubation initiative and the custom-made programs, that have been designed to support technology startups, and specifically how they could be utilized by blockchain startups.

First “STEP”

HKSTP currently has three stages of support programs for technology startups. Mok said, “The goal is to support startups beginning from their conception stage all the way to their IPO. It is not necessary for the participants to even have a minimum viable product (MVP) during the application stage; we will start our support from the idea. At each of the three stages of incubation, a financial subsidy is included for the startup.”

The first stage is a year-long program aptly named Science and Technology Entrepreneur Programme (STEP). Mok explained, “STEP is ultimately an idea generation which helps potential startups or even a single founder validate their business plan and theoretically confront the issues that could potentially arise in the market through assimilation training. The participants will also be advised on the government assistance schemes for which they may be eligible. Once this stage is complete, not only will the startup teams know if their idea is viable, but they will also learn what is required of them to do business in this sector. Those that qualify for incubation will enjoy a full range of tailor-made support services and facilities that will help drive their business to the next level of development.”

Core incubation

Once the STEP program is completed, the participants can move to one of the three core incubation programs. Mok said, “The core programs focus more on the MVP—prototyping, commercialization, R&D and the initial market offering.” To qualify for the programs, applicants must be a Hong Kong-registered technology startup company limited by shares and established within no more than 2 years on or before the date of the application. Mok expounded, “The admissions criteria are quite broad, but we really evaluate our applicants based on four major but basic elements – the team combination; the business plan; the level of innovation and of course whether we believe the endeavor has a chance for success.”

Incu-App – a 2-year program aimed at companies and startups focused on electronics, green technology, ICT technology, and material and precision engineering;
Incu-Tech – a 3-year program aimed at technology startups, working in deep tech research, during their inception stages; and
Incu-Bio – a 4-year program aimed at supporting the growth and development of biomedical tech start-ups in Hong Kong.

Three incubation programmes offered in HKSTP. Photo:Wheelock Gallery of HKSTP, Admiralty

Mok highlighted HKSTP’s understanding of the hard work and determination it takes to create the perfect product, application or device especially for those that plan to innovate and change the world we live in. He reiterated, “We aim to provide support every step of the way to help technology startups turn their vision into reality.”

When technology startups are ready to take on the world stage, HKSTP offers the Leading Enterprises Acceleration Programme (LEAP) catering to their needs for global business expansion. The LEAP is designed for startups with viable market products and scalable business model. Mok said, “Upon admission, LEAP acceleratees will enjoy a wide range of world-class support and subsidies, including the support to expand their business into the Greater Bay Area (GBA) market, a cluster of 11 cities with a combined population of 65 million and GDP of USD $1.36 trillion (compared to USD $0.76 trillion for San Francisco Bay). In addition, startups can access funding up to HK$ 4.7 million for subsidies and support from fundraising, business development, and professional services.”

Smart Region for a Smart City

The government of HKSAR published the Smart City Blueprint in December 2017, mapping out a development plan designed to embrace innovation and technology, enhance the effectiveness of city management and improve people’s quality of life.

In response, Hong Kong Science Park, a designated smart region living lab in the blueprint, create the ideal testbed for pushing forward the Smart City vision, leveraging the city’s attributes of dense population, efficiency, world-class ICT infrastructure, and high internet connectivity. Mok explained, “Hong Kong is a very highly developed city with a very dense population who are used to convenience. It’s very difficult, to deploy and test any new technological infrastructure without causing major delays and disruption for the people.”

HKSTP is often described as a ‘living laboratory’ that supports and pilots innovative solutions and fosters the adoption of new technologies. As well as providing a platform and support for innovative university research, those in the Smart Region are exposed to HKSTP’s other partners which include some of Hong Kong’s leading corporations as well as other major global entities. Mok highlighted, “We have partnered with over 63 leading corporations from Hong Kong, and globally, which allows our incubation participants and researchers under the startup scheme to meet with corporate leaders—these include organizations such as the Hong Kong Airport Authority, Cathay Pacific and TLC—fostering a collaborative platform for the technological ecosystem and the business sector as well as the sharing of ideas and the co-creation of data applications to deliver socio-economic benefits.”

The accelerating roadmap

In the future, the HKSTP will continue to strengthen its smart innovation and startup support with the introduction of various acceleration programs and corporate matching initiatives.

HKSTP connects startups to investors. Photo: Wheelock Gallery of HKSTP, Admiralty

“In the past, we were mainly focusing on helping startups in Hong Kong and linking them to corporate industry and we will continue to do so,” said Mok. “But we are also running a lot of new acceleration programs such as the IDM2 Hardware Accelerator— it is a hardware solutions program which IDM2 stands for Ideas to Design for Manufacturing and Marketing. This complements our various incubation programs as 51% of these companies come with their own hardware, so hardware acceleration is a logical next step.”

Another new initiative, the Global Acceleration Academy (GAA) aims to connect high-potential startups with world-class industry leaders and bring their innovations to the real-world marketplace. “The GAA program actually serves as a bridge for the market demands and technology at a very early stage. We go inside the corporations with access to their data. They can express their challenges and customer requirements directly to our start-ups who can create tailor-made solutions.” said Mok. “It’s actually a type of early customer engagement, we are not waiting for customers to tell us what to build, we are innovating ahead of the demand.”

The overarching goal of HKSTP is to become the technological launching pad for all of the Asia Pacific. Mok concluded, “We want the best talent from Asia. Leveraging the traditional gateway position of Hong Kong, our focus will be more on deep technology. We have a world-class research foundation for technology research, especially in the realm of biotech momentum technologies. The strides we have already made will distinguish us from most, if not all of the Asian cities, and draw in the best of best researchers globally.”

Part 2 of the interview is coming up, stay tuned!

Peter Mok image via techgoondu.com

Ping An of China’s Blockchain Unit Chooses US over Hong Kong for IPO

Chinese insurance giant, Ping An Insurance’s financial technology arm, OneConnect is leaning towards choosing New York over Hong Kong for its initial public offering (IPO) this year in mid-November.

As China’s biggest insurer by market value, Ping An Insurance Group was planning its IPO originally in Hong Kong, aiming at a deal that could raise up to $1 billion at a valuation of around $8 billion. Invested by Japan’s SoftBank Corp, the insurer was earlier looking to launch the IPO as early as this month.

The Chinese insurance giant is now looking to list OneConnect in the United States this month, according to a reliable source who shared this news with Reuters. New York was chosen over Hong Kong for this IPO in the hopes of achieving a higher valuation.

A source, who declined to be identified stated that the unit’s timetable to IPO could change subject to market conditions and investor reaction.

PingAn’s OneConnect received a virtual banking license by the Hong Kong Monetary Authority (HKMA) earlier this year to operate in Hong Kong. The insurance giant also helped the HKMA to build a blockchain trade finance platform, eTradeConnect.

JPMorgan, Goldman Sachs and Morgan Stanley were selected previously to work on OneConnect’s IPO.

Image via Shutterstock

Hong Kong with its Incredibly Unique Positioning in FinTech

In the second part of our interview with Peter Mok, Head of Incubation and Acceleration Programs at the Hong Kong Science and Technology Park (HKSTP), he went into detail on the initiatives they have developed to combat the global talent shortage, bring Hong Kong’s lagging Fintech industry up to speed and he tells us how blockchain startups can leverage the Hong Kong-Shenzhen Innovation and Technology Park.

3 Initiatives to Combat the Global Talent Shortage

Over the last decade, industries across the world have had to contend with the digital disruption of the Fourth Industrial revolution. Big industry had just experienced the global financial crisis and were too busy trying to maintain the status quo to adopt the new technology. The exponential explosion of new innovative technologies has created an equally impressive chasm in the technologically skilled workforce which has contributed significantly to the global talent shortage. In this ever-changing and unpredictable environment, HKSTP has remained committed to growing Hong Kong’s Innovation and Technology (I&T) ecosystem and has relentlessly strived to connect I&T companies with the right talent.

After a few years committed to driving corporate interest in the Hong Kong I&T market, the lack of talent to meet the demand became a severe issue. Mok said, “In Hong Kong, we found an acute lack of talent for areas such as ‘life science’ and ‘IoT’ which are a huge part of our Smart City development. We came up with three main areas of support for our talent—placement training, the Hong Kong Science Park Career Expo and government collaboration.”

The Hong Kong Science Park is not a school and has no set curriculum. Mok expounded, “We don’t hire directly from the market. We work closely with research universities, community colleges and post-secondary colleges such as the Vocational Training Council, to channel their most promising students into the Hong Kong Science Park. Those students will be given a summer placement in a tech-company environment whether it be fintech, blockchain, life science, etc.” He continued, “While there is no set agreement for the company to offer more than a summer internship, the students are often invited to continue working part-time and in the majority of cases will confirm their employment with the organization before they graduate.”

The second support system in place for emerging Hong Kong talent is the annual Hong Kong Science Park Career Expo. This year, the Expo saw its largest turnout with over 13,000 visitors seeking information and new careers with Hong Kong’s growing I&T sector. Mok shared, “Over 1600 positions were offered at the Expo this year by around 150 local and international companies. The four major technology fields (Biomedical Technology, Artificial Intelligence and Machine Learning, Smart City and FinTech) were well represented. The Expo has become a very important event for not only our I&T talent but also talent seeking technology-related positions which are also in high demand.”

HKSTP’s third area of support for I&T talent is research subsidy through two programs created in collaboration with the Hong Kong Government— the Researcher Programme and Postdoctoral Hub Programme. Mok explained, “Every company that resides in the Science Park will be able to apply for up to two researchers in the Researcher Programme and the R&D projects under the “Innovation and Technology Fund” (ITF) can engage up to 2 postdoctoral talent for Postdoctoral programme applications. The Researcher Programme supports park companies to recruit graduates with a Bachelor’s or Postgraduate degree in assisting R&D projects on a full-time basis for 3 years. For Postdoctoral Hub Programme, the park companies can hire PhDs from local or overseas universities. Visa application is often a pain point in recruiting overseas talents. This issue can now be addressed by the Technology Talent Admission Scheme (TechTAS) launched by the government. HKSTP will help the park companies submit the application to facilitate visa applications of overseas talents. He added, “There are no limitations on the nationality of the researchers and through this scheme, we can attract the best researchers both locally and globally.”

Hong Kong’s FinTech position is “Incredibly Unique”

Financial Technology, more commonly referred to as FinTech, looks set to reshape the financial sector in the coming years and presents Hong Kong with both challenges and opportunities. According to various reports, Hong Kong, despite its large financial sector, as of yet has only had a modest showing in the FinTech space and lags behind cities such as Shenzhen, Taipei, and Singapore.

“Hong Kong’s position is incredibly unique when compared to our rival Asian cities. The quality of our economic structure, the free flow of capital and information sets us apart. However, presenting our low-tax rate to a struggling tech startup that has not yet made any revenue is not effective motivation for them to set up their business.” Mok said, “Our STEP programme will help bridge the gap in FinTech, through the support we can offer these tech startups in our ‘Incu-App’ and ‘Incu-Tech’ programs as well as the support-systems I’ve already mentioned. For example, one of our Incu-Tech companies which has only been established for two years is already working with around ten of the largest banks in the world, so we have already had some success.”

Hong Kong’s position as one of the top three global financial centers means that a lot of legacy financial systems are already in place. Mok believes that, eventually, this financial history and experience will allow Hong Kong to overtake its rivals in the FinTech space. “Cities like Shenzhen appear further along, and to some extent they are, but their focus has mainly been on e-payments and e-remittance because they don’t have the legacy systems in areas such as compliance to enhance, they will need to build these systems from the ground up.”

He added, “The Greater Bay Area initiative will also require us to work together and advance together technologically. Competition with the cities in the GBA happens on a daily basis, however, don’t underestimate the potential of collaboration with your partners or competitors. The GBA will allow more collaboration with our neighbors and we can learn from each other.”

Lok Ma Chau Loop: The Tech Gateway for the GBA

The HKSTP’s infrastructure for research and development is world-class and there are plans to continue its expansion but ultimately, they are limited by the space around them. Occupying a strategic location in Hong Kong bordering Shenzhen, the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop offers four times as much land area as Hong Kong Science Park, giving Hong Kong’s innovation and technology ecosystem more room to grow.

HKSTP’s infrastructure in facilitating Greater Bay Area collaboration, photo taken in Wheelock Gallery of HKSTP, Admiralty

Size matters but the location matters more to Mok. He explained, “Having a fully integrated Science Park on the Lok Ma Chau Loop is important as it allows us to share our relevant expertise and to tap the supply chain, manufacturing capabilities and talent pool across the border. This sharing of technical knowledge will be critical to the development of the Greater Bay Area.”

Peter Mok image via techgoondu.com

FinTech in Belt and Road – Transforming French Freight Logistics with Blockchain

The Fourth Belt and Road Summit was held over two days in September at the Hong Kong Convention and Exhibition Centre (HKCEC). The Summit was organized in a joint effort by the Hong Kong Government, the Hong Kong Trade and Development Council (HKTDC). The event was attended by top government officials and business leaders from Hong Kong, China and countries along the Belt and Road.The Belt and Road Initiative (BRI) seeks to improve trade connectivity by upgrading transport infrastructure across much of Eurasia. The undertaking spans a massive geographic area covering as many as 63 countries, accounting for sixty percent of the world’s population and thirty percent of global GDP.Blockchain.News took the opportunity to speak with the attending representatives from Europe, Asia and the Middle East to learn more about their countries’ latest developments related to the Belt and Road Initiative.

Europe

The Belt and Road project centers around two main routes over land and sea. On land, the focus is on transport and energy infrastructure for the Silk Road Economic Belt (the Belt). By sea, investments in new ports serve as pillars for promoting trade along the Maritime Silk Road (the Road). Both will impact Europe massively. The land route ends up in Europe and the sea route is currently the busiest trade corridor between Europe and China.The continued efforts to harness the potential and enhance the efficiency of these land and sea routes, has been met with significant historical challenges. In cargo and freight there has been no common platform for operations and the responsibility is most often shared among a multitude of operators leading to complications of transparency, online tracking, predictability, accessibility and booking within trade routes. In France, decentralized transport and logistics platforms based on Blockchain are seen as the innovative solution to historical issues.

Invest in Provence and the Port of Marseilles

The Invest in Provence Agency is the official economic board for the Provence region of southern France. Philippe Stefanini, CEO of Invest in Provence explained, “The Agency supports international companies, and especially Chinese companies. Our services are free and confidential and we can support these companies by connecting them with the right partners and location for their operations.”The Port of Marseille is fast becoming the central digital port connecting Europe to Africa, China and the Middle East. Stefanini said, “The Port of Marseille represents one of the main business expansion opportunities for the Belt and Road Initiative. We have 14 digital submarine cables and we will soon welcome the Peace cable from China, making us the main digital port for Chinese submarine cables. As a leading digital connection hub, we are able to support FinTech organizations who wish to deliver their services to customers in Europe with direct cable links from China and Asia.” He continued, “In terms of logistics, transporting goods from China to Europe is four days shorter than any alternative route, thus offering the quickest way for Chinese companies to enter the European Market.”

Marseille and its port are looking to develop cooperation on industrial and logistic projects with China fostering reciprocity and focused on high social and environmental standards. Stefanini highlighted, “The China Merchants have invested in the Port of Marseilles Containers Platform. Our largest investments so far have come from China Mobile, China Unicom and China Telecom who have recently established their main infrastructure for Southern Europe in Marseille’s digital port.”

Philippe Stefanini, on the opportunities to Invest in Provence due to recent macroeconomic uncertainties

While the China-US trade war may be a macro-economic concern for most, Stefanini believes that, “Mainland Europe will continue to be a strong and stable partner for Chinese companies and there is an ever-increasing willingness to foster further business opportunities.”Blockchain Enhanced Freight Logistics

The Marseille Fos Port Authority is among the financial backers of a Blockchain technology pilot scheme that aims to demonstrate enhanced freight logistics on the Mediterranean-Rhone-Saone (MeRS) axis.

Stephane Reiche, on how blockchain takes flight in freight logistics across the MeRS

Offering comment on the rationale for the blockchain initiative—Stephan Reiche, General Delegate of Marseille Fos Port Authority said, “Many of the actors along the MeRS axis supply chain are still not digitalized, like truck drivers for example. They still exchange paper documents and certificates manually which is too inefficient for 21st Century logistics and this is an area where blockchain can be leveraged.” He continued, “With blockchain, you have the possibility to give “certified users direct access to protected documentation, enabling numerous parties to share data without the need for dedicated infrastructure.”

Marseille Fos Port Authority has been working with three startups, each one specializing in a different component of the logistics blockchain—cargo tracking specialist Marseille Gyptis International (MGI); BuyCo, a collaborative platform for container shipping; and blockchain solutions specialist KeeeX. Further elaborating on these collaborations, Reiche said, “MGI developed our Cargo Community System which checks the administrative status of every container coming through the port. BuyCo’s software allows for seamless merging of the different logistics actors into one supply chain, so containers moving from shipping routes to the land routes are synchronized. KeeeX specializes in blockchain certification.”

The blockchain system has been tested by two industrial companies, Kem one and Alteo and Reiche reports, “Everything has gone very smoothly, this blockchain initiative has increased logistics transparency as all the information is being synchronized on the blockchain so that it can be accessed by everyone involved. At any moment we know exactly where the cargo is in the logistics chain.”

The blockchain initiative is in its live testing stage and so far has produced exciting results and based on this success, Reiche predicts that the project could expand to other regions in France and ports throughout the Mediterranean Sea. He concluded, “In June 2018, we set up the Medports Association and we would like to implement this system through the different associations and further increase the transparency and connectivity of logistics throughout the Mediterranean utilizing the same blockchain technology.”

The Greater Paris Project

10 years ago, French President Nicolas Sarkozy launched the Greater Paris Project, with the aim of transforming the Paris metropolitan area into a major world and European metropolis for the 21st century, aimed at improving the living environment of the inhabitants, correcting the territorial inequalities and building a sustainable city. Alexandre Missoffe, Managing Director of Greater Paris-Investment Agency describes the project as, “One of the most important human development projects in Europe over the last few decades.” He explained, “We have a long-term strategy, backed by a 40 million dollar investment from the French Government, to better connect the greater Paris region with it suburbs and organize the Paris region as a cluster of hubs for finance, scientific research, biotechnology, and sustainable city industry.”

Alexandre Missoffe, on the collaboration with HKTDC under the Belt and Road initiative

Regarding the Belt and Road Initiative, Missoffe said, “Our perception is that what we are trying to achieve with the Greater Paris Project is in sync with the ideas and philosophy of the Belt and Road—creating the infrastructure to support better trade, communication and connectivity.” He highlighted, “We have been working with the HKTDC over the last three years on the Belt and Road Portal—making financial sharing investments but also sharing experience and expertise. For example, the achievements of the Hong Kong MTR serves as great inspiration for us as a significant part of the enhancement of Paris’ connectivity is 200 kilometers of new metro.”

Blockchain and FinTech in Paris

With Brexit looming in Europe, Misoffe has noted a lot of large banks, key financial players and organizations have been relocating to the greater Paris area. He said, “A part of our strategy is to create the ideal ecosystem to foster the growth of the finance industry and especially FinTech in Paris. We have set up an incubation program dedicated to FinTech startups, this initiative complements our wonderful schools, engineering institutes, and world class research centers. We are positioning Paris as a very attractive place for FinTech.”

FinTech is basically the use of technology to deliver banking and financial services making it the ideal area for the implementation of a blockchain which offers unparalleled security. Misoffe explained, “Blockchain typically goes hand in hand with FinTech but also with sustainable and smart city development. In high urban environments, we are constantly exchanging data in the way we use the city’s facilities, hospitals, transportation etc. The data that is shared must be protected and kept authenticate and blockchain and distributed ledger technologically (DLT) can achieve that. We are working closely with SAP to put blockchain at the heart of our sustainable city.”

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Venezuela’s Central Bank Considers the Potential of Bitcoin and Ethereum

Anonymous sources have offered direct insights into the Venezuelan’s Central Bank’s consideration of adopting Bitcoin (BTC) and Ether (ETH) payment systems.

According to an article by Bloomberg, the central bank of Venezuela is open to potentially storing cryptocurrencies. At the heart of the issue is the difficulty experienced in receiving payments from international clients to state-run and oil gas company: Petroleos de Venezuela S.A. (PSDV). Adding to the transactional difficulties are the US imposed sanctions against Venezuelan President Nicolas Maduro’s current regime.

Several other sources have also said that PSDV will implement transfers of Bitcoin and Ethereum to the Venezuelan central bank and then have the central institution repay suppliers in these cryptocurrencies. 

For the Venezuelan economy, tackling isolation from the global financial systems remains the biggest issue. As a result, Venezuela’s Central Bank is running internal tests to determine whether it can hold cryptocurrencies in its coffers that would equal the country’s international reserves, which are valued at a 30-year low of $7.9 billion.

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