The news that Hong Kong and Singapore are to collaborate on a blockchain-based solution for trade finance has received a mixed response.
Most tech experts have welcomed the potential collaboration, of which few details have yet been released.
The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority signed the memorandum at the recent Fintech Week in Hong Kong, with more detail to follow in the coming weeks.
It will involve Singapore’s National Trade Platform, the city state’s efforts to digitise trade, and builds on a proof of concept which the HKMA developed in line with Deloitte earlier this year to leverage distributed ledger technology (DLT) and create a smart contract prototype for open account trade financing.
Deloitte has welcomed the news, saying that it shows blockchain technology is ready to move into the production phase in the region.
“Trade is largely a cross-border activity with a diversified group of participants in the ecosystem, rendering it a perfect use case for blockchain implementation. It also reaffirms our view that blockchain is no longer a hype but a technology ready for production. Last but not least, fintech is all about collaboration instead of competition, and the collaboration between Hong Kong and Singapore sets a salient example for the whole industry,” Paul Sin, Deloitte China consulting partner, tells GTR.
This view is partially shared by Aurélien Menant, founder & CEO of Gatecoin, a blockchain assets exchange based in Hong Kong, who agrees that collaboration can help improve the technology, but who wonders about the project’s very purpose.
“Both Hong Kong and Singapore have had different approaches towards the development of their local fintech ecosystems. Therefore it is positive that they are trying to learn from each other’s achievements and mistakes through closer collaboration. However, it is difficult to tell how this initiative will positively impact the startups building new services and applications involving blockchain technologies. By its nature blockchain technology is not confined to any borders, so a cross-border initiative is quite redundant,” he says.
More news will likely follow at the Singapore Fintech Festival, which takes place later in November, but the heads of both monetary authorities have claimed the collaboration is of huge significance.
Norman Chan, CEO of the HKMA, says: “Hong Kong and Singapore are the two leading international financial centres in the region and are actively deploying fintech. Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets.”
His counterpart at MAS, Ravi Menon, adds: “MAS is delighted to embark on this fintech partnership with Hong Kong. This is one of our more significant fintech co-operation agreements, given the extensive financial and trade linkages between Singapore and Hong Kong. We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres.”