The central banks and financial regulators of Singapore and Hong Kong have inked a cooperation agreement to strengthen FinTech ties and work on a blockchain trade finance project.
In a joint–announcement today, the Monetary Authority of Singapore (MAS) and the Kong Kong Monetary Authority – the two cities’ central banks – signed a FinTech Co-operation Agreement aimed at bolstering fintech ties and furthering fintech development in South-East Asia.
The partnership is particularly notable due to their geographical proximity and common technology-forward ideologies that has routinely pitted the two cities as traditional rivals. Both cities are global hubs for trade, finance, and travelers. Lately, however, there has been a shift from aggressive competition to co-operation, particularly in the financial sector.
“Traditionally as a financial centre, there’s that comparison between Singapore and Hong Kong,” stated Roy Teo, head of MAS’ financial centre development department in reference to the rivalry. “But when it comes to fintech, this is where we recognize that there’s a lot of need for collaboration between the regulators.”
The first collaboration will see the two financial authorities work on a cross-border trade finance initiative powered by blockchain technology. Details of the project are currently scarce but could prove a significant undertaking between two major trade hubs. Joint innovation projects aside, the two monetary authorities will also refer local innovative businesses and startups to each other, exchange expertise and share information to further FinTech development in each other’s markets.
MAS managing director Ravi Menon stated:
This is one of our more significant fintech co-operation agreements, given the extensive financial and trade linkages between Singapore and Hong Kong. We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres.
The agreement was signed during the launch of HKMA’s FinTech day in Hong Kong as a part of the Hong Kong FinTech Week which is expected to bring in 3,000 executives from around the world. Singapore will hold its own FinTech festival in mid-November, where it is expected to reveal a technical report of Phase 2 of Project Ubin, an initiative by the central bank to develop and deploy a digital Singaporean dollar on a blockchain.
Norman Chan, chief executive of Hong Kong’s defacto central bank added:
Hong Kong and Singapore are the two leading international financial centres in the region and are actively deploying fintech. Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets.
Hong Kong harbor lanterns image from Shutterstock.