A significant number of blockchain companies moved to Hong Kong in 2019 compared to the number of companies from any other fintech subsector, according to a report from the region's Financial Services and Treasury Bureau.
Hong Kong's industrial sector actively invests in blockchain
If you look at the transfer dynamics of fintech companies in Hong Kong, blockchain has surpassed the sectors of luxury technology, payments, cybersecurity, regulatory technology, credit technology and insurance, accounting for 39% of the 57 fintech firms that InvestHK, the government-owned internal investment supporter, wooed last year.
The growth figures describe a region that keeps interest and commitment towards companies included in the blockchain and crypto ecosystem high. Since 2018, the authorities have offered immigration incentives to jobseekers in the blockchain industry, launched a platform for funding blockchain trade and for building ties with the industry.
These efforts seem to bear fruit in several respects. Hong Kong had four times the average demand for blockchain professionals according to a 2019 LinkedIn report, which ranked the blockchain as the region's fastest growing skill set.
Much diversification in the blockchain focus
Hong Kong's heightened interest in blockchain companies is spreading across the industry, says the Treasury Bureau report. Of the new blockchain entities acquired in 2019, 45% were corporate blockchain businesses, 27% built digital asset trading platforms, 14% were digital asset custodians, and 9% focused on setting up commercial funding.
A further 5% were "exploring the security token area" according to the report. The latter weak percentage could represent a sign of growth due to the nascent regulatory status of security tokens.
The Hong Kong financial regulator published a guide on security tokens in March 2019 and the regulations to be followed for the exchanges involved in November. But the rules of the Securities and Futures Commission trading platform are only a "temporary solution", according to the report. In fact, the commission asked for wider legislative action on the matter. Blockchain companies represented 27% of all new companies in which InvestHK decided to invest in 2018, the report says.
Hong Kong continued to attract cryptocurrency initiatives and investments in 2020, including the capital of institutional figures. In February, Fidelity International invested $ 14 million in the Hong Kong-based cryptocurrency exchange company OSL.
This growing trend of the crypto and blockchain sector will likely continue to assert itself in the future as well. Cyberport, a government-owned fintech business park and Hyperledger partner, plans to continue promoting its blockchain cluster, according to the report.
