Li Jiachao's Policy Address promotes the “upgrade” of digital banking, and Zhongan Bank leads the development of digital banking in Hong Kong

The Zhitong Finance App learned that the Chief Executive of the Hong Kong Special Administrative Region, Li Jiachao, released the 2024 Policy Address today. The report said that the Hong Kong Government will continue to promote innovative financial services such as central bank digital currency, mobile payments, virtual banking, virtual insurance, and virtual asset transactions. The Hong Kong Treasury Bureau will issue a policy declaration explaining the policy position and policy on the application of artificial intelligence in financial markets.

The report also pointed out that currently, the Hong Kong Monetary Authority is testing the tokenization of electronic bills of lading through the “Ensemble” project sandbox, making good use of technology to reduce the risk of fraud and assist financial institutions to approve trade-related financing. The HKMA and other regions will develop mechanisms for transmitting relevant trade data in an experimental format to promote cross-border data flow and the digitalization of international trade; they will also allow potential issuers to test different blockchain application scenarios, including cross-border payment solutions, through the “stablecoin issuer sandbox”.

It is worth noting that previously Zhongan Bank cooperated with RD InnoTech Limited (“RD InnoTech”), one of the first sandbox participants in the Hong Kong Monetary Authority, to become the first digital bank in Hong Kong to provide exclusive reserve bank services for stablecoin issuers, providing security for their fiat currency reserves.

On October 14, the Hong Kong Monetary Authority published a summary of the public consultation on the “Virtual Bank” name change proposal, stating that the Hong Kong Monetary Authority will revise the “Approval of Virtual Banks” guidelines to implement the use of the new name “Digital Bank” as soon as possible. Ronald Yao, CEO of Zhongan Bank, said, “We welcome the Hong Kong Monetary Authority's completion of the virtual bank name change consultation, and are pleased to see that the industry and the public generally agree that the name 'digital bank' more accurately reflects the nature of the industry. We believe that the name change will help dispel public misunderstandings and give the public a clearer understanding of the digital banking operating model.”

According to information, as the first digital bank to open in Hong Kong, as of June 30, 2024, Zhongan Bank had the highest number of users and deposits among the eight digital banks in Hong Kong. In terms of performance, Zhongan Bank announced that it would turn losses into profits in July of a single month, making it the first profitable digital bank in Hong Kong.