Government-backed research in Hong Kong has identified decentralized finance (DeFi) and metaverse technologies as pivotal avenues for bolstering the region’s influence in global fintech. The Hong Kong Institute for Monetary and Financial Research (HKIMR), affiliated with the Hong Kong Academy of Finance (AoF), unveiled two reports on June 25th, delving into the impact of DeFi and the metaverse on the financial sector.
The report on DeFi underscored its meteoric rise, catapulting from a modest $6 billion market cap in 2021 to over $80 billion by 2023. It highlighted DeFi’s burgeoning potential within the crypto-asset market, where it currently occupies 4% share, yet remains largely untapped—over 70% of surveyed crypto businesses have yet to explore its capabilities.
While acknowledging challenges such as governance and compliance, the study remained optimistic about DeFi’s distinctive features.
Regarding the metaverse, the Hong Kong study noted moderate engagement from local financial institutions despite strong interest. This sentiment was echoed by respondents, with more than half expressing skepticism about the metaverse’s future, including 6% of metaverse service providers.
Nonetheless, a segment of Hong Kong’s fintech sector actively pursues metaverse-related innovations. Enoch Fung, CEO of AoF and executive director of HKIMR, emphasized ongoing developments in this realm.