Once fierce rivals, Hong Kong and Singapore have come together to strengthen the FinTech ties between the two nations. More specifically, the central banks and monetary authorities of the two regions have united in order to develop a blockchain project that will be used between the two markets.
The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA) together with their central banks have signed an agreement which is aimed at strengthening the finance ties between the two. The agreement is also expected to spur FinTech innovation in South East Asia and make the region a powerhouse in technology.
Hong Kong and Singapore have a long tradition of fierce business rivalry due to their ideologies. They all have common interests in trade and finance and have always tried to outdo the other when it comes to attracting business to their respective regions. It therefore came as a shocker when the two regions came together to cooperate. However, critics argue that the recent years have seen a gradual shift from aggression to cooperation between the two regional powerhouses.
Need for collaboration
Both regions have accepted the fact that they need each other’s help when it comes to FinTech. They also agreed to collaborate in projects such as data sharing, business innovation and exchange of expertise over and above the blockchain project that they will be working on.
The blockchain technology will be used to run a cross border trade finance initiative though further details about the project are scarce. However, Norman Chan, the Chief Executive of HKMA has indicated that the project has the potential to create synergies and efficient fund flows between the two markets.
Cryptocurrency center and Project Ubin
This is not the first project that Singapore has adopted with regards to FinTech. It has also been developing Project Ubin, an initiative to deploy the Singaporean dollar on the blockchain. The project is currently in phase 2 of its development and it’s expected that the Singaporean dollar might be floated on the blockchain that is being developed between the two markets.
Hong Kong on the other hand has been developing fast as a cryptocurrency center. It’s therefore expected that the collaboration between the two markets will be revolutionary as far as blockchain technology is concerned.
Increased trade ties
Whereas the blockchain technology might take a longer time to be completed, the trade agreements between the two markets will drive innovation and expertise exchange in the short run. This will serve to strengthen the two markets and enhance trade finance.
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