The article is a summary of a panel discussion on "Hong Kong: The next virtual assets hub?" organized by CUHK Alumni Enterprenuership Foundation. The panel was participated by Raymond Lam, co-founder and CTO of Custonomy, who shared his insights and expertise on the topic. The discussion focused on how fintech and virtual asset startups in Hong Kong can position themselves under the new regulatory regimes in Hong Kong and other Asia-Pacific countries. The panelists discussed various strategies that startups can use to comply with regulations, demonstrate the value of their products and services, position themselves as thought leaders in their field, and differentiate themselves from competitors. The discussion also touched on the opportunities and challenges that startups may face in the current regulatory environment and how they can create unique value propositions to fit into the ecosystem alongside traditional financial institutions.
From a macro perspective, fintech and VA (virtual assets) startups in Hong Kong can position their roles in several ways under the new regulatory regimes of Hong Kong and other APAC (Asia-Pacific) countries.
One way is by working closely with regulatory authorities to ensure that their products and services comply with the relevant laws and regulations. This can involve engaging in dialogue with regulators, obtaining necessary licenses and approvals, and implementing robust compliance and risk management measures.
Another way is by demonstrating the value and benefits of their products and services to both consumers and regulators. This can include highlighting how their solutions can improve financial inclusion, increase efficiency, reduce costs, and drive innovation in the financial sector.
Startups can also position themselves as thought leaders in their respective fields and contribute to the development of industry standards and best practices. This can involve participating in industry events and forums, collaborating with other firms and stakeholders, and sharing insights and expertise through thought leadership content and other channels.
Finally, startups can seek to differentiate themselves from competitors by offering unique and innovative solutions that address unmet needs and challenges in the market. This can involve leveraging emerging technologies such as artificial intelligence, blockchain, and the Internet of Things to create novel products and services that address specific pain points or opportunities in the market.
From a micro perspective, fintech and VA (virtual assets) startups in Hong Kong can create unique value propositions to fit into the ecosystem alongside traditional financial institutions in several ways.
One way is by partnering with traditional financial institutions to offer complementary products and services. For example, a fintech startup could offer a digital banking platform that integrates with the traditional banking services of a financial institution, or a VA startup could offer a secure and efficient platform for managing digital assets that is integrated with the traditional asset management services of a financial institution.
Another way is by identifying specific pain points or inefficiencies in the traditional financial system and offering solutions that address those issues. For example, a fintech startup could offer a mobile payment solution that is faster and more convenient than traditional payment methods, or a VA startup could offer a platform for securely and transparently tracking and settling trades in real-time.
Startups can also create unique value propositions by leveraging their agility and ability to innovate to offer products and services that are faster, cheaper, or more convenient than those offered by traditional financial institutions. For example, a fintech startup could offer a robo-advisory platform that uses algorithms to provide personalized investment recommendations at a lower cost than traditional financial advisors, or a VA startup could offer a decentralized exchange that allows users to trade digital assets in a peer-to-peer manner without the need for intermediaries.
Finally, startups can differentiate themselves by offering specialized products and services that cater to specific niches or segments of the market that may be underserved by traditional financial institutions. For example, a fintech startup could offer a platform for crowdfunding that allows small businesses to access capital from a wide range of investors, or a VA startup could offer a platform for securely and transparently tracking and verifying the provenance of luxury goods.
Decentralization is indeed a core value of blockchain technology, as it allows for the creation of networks that are transparent, secure, and resistant to censorship. However, regulatory regimes can be seen as a form of centralization, as they involve the creation of rules and standards that apply to all participants in a given market or industry.
To create an equilibrium or balance between decentralization and regulation, governments can take a number of steps to attract fintech talent both locally and globally.
One approach is to establish clear and transparent regulatory frameworks that provide clarity and predictability for fintech firms. This can involve creating specific regulations or guidelines for different areas of the fintech sector, such as payments, lending, and asset management, and working with industry stakeholders to ensure that these rules are fair and effective.
Another approach is to create a supportive ecosystem for fintech firms by providing access to funding, talent, and other resources. This can include establishing programs or initiatives to support fintech startups, such as incubators, accelerators, and co-working spaces, and working with universities and other educational institutions to foster the development of fintech expertise.
Finally, governments can also seek to create a favorable business environment for fintech firms by offering tax incentives, simplifying business registration processes, and providing access to important infrastructure such as broadband internet and financial infrastructure. By taking a balanced approach that combines clear and transparent regulation with a supportive ecosystem and favorable business environment, governments can create an equilibrium that attracts fintech talent locally and globally while also ensuring the stability and integrity of the financial system.