Hong Kong Accelerates Fintech Growth by Emphasizing DeFi and Metaverse Technologies

The Hong Kong government has shifted its focus to decentralized finance (DeFi) and metaverse technologies to strengthen its global fintech standing.

Recent reports from the Hong Kong Institute for Monetary and Financial Research (HKIMR), the research division of the Hong Kong Academy of Finance (AoF), support this move.

The HKIMR report on DeFi notes its substantial growth, with market capitalization soaring from $6 billion in 2021 to over $80 billion in 2023. Despite this rapid expansion, DeFi currently represents only 4% of the overall crypto-asset market. The report suggests that over 70% of crypto businesses must fully explore DeFi’s possibilities.

The report acknowledges DeFi’s challenges, including governance, compliance, and vulnerabilities. Nonetheless, it remains optimistic about DeFi’s potential to introduce innovative financial services. These services can enhance automation and financial inclusion, making them a noteworthy aspect of future financial systems.