Tokenization is a major focus of Hong Kong FinTech Week this year, as banks and technology companies presented various use cases of tokenization as a next wave of fintech innovations.

On Monday, Eric Jing, Chairman & CEO of Ant Group and Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority discussed this new technology, as well as artificial intelligence and digital transformation, in a fireside chat at Hong Kong Fintech Week.

On one side, tokenized deposits have huge potential for cross-border payments due to three core features, according to Eric. Firstly, tokenized deposits provide point-to-point direct connection settlement by forgoing a complex intermediary model. Secondly, they operate 24/7 with no interruptions. Finally, they are programmable with payment conditions on-chain for automated execution.

These features bring down payment costs, increase efficiency, and enhance liquidity management. As more SMEs engage in global trade, the challenges on global settlement and payment can be alleviated by tokenized deposit.

On the other side, digital assets and Real-World Asset tokenization (RWA) brought even more interesting applications. 

In Project Ensemble of Hong Kong Monetary Authority (HKMA), Ant Group partnered with a tech company LongShine to tokenize green assets, specifically EV charging piles. This enabled LongShine to secure RMB100 million in cross-border funding from professional investors, significantly increasing the efficiency of global investment and trading and proving that the Web3 ecosystem is evolving from cryptocurrency applications to the real economy.

Eric Jing shared his suggestions to the development of digital assets in Hong Kong. “Hong Kong, as a premier digital hub and leading financial center, has a unique opportunity to become a leader in securities tokenization and trading, particularly focused on real-world assets like green assets. This can aid green transformation and address climate change, while also opening up a significant market for green asset tokenization” he said.

“Project Ensemble is a perfect example: it’s progressive, use-case-driven, and inclusive. It includes not only large institutions but also many tech startups, allowing for broad participation in innovation that can have a big impact,” according to Jing.

Addressing an audience during the fireside chat, the two executives also discussed digital technologies and inclusive finance, highlighting how these benefit a variety of stakeholders.

For example, AlipayHK collaborates with local partners to enhance global connectivity, enabling AlipayHK users to make purchases from international merchants and providing increased offline support in over 50 countries and regions. Similar partnerships with local merchants facilitate payments from inbound travelers through Alipay+ cross-border digital payments.

Now serving over 4.2 million users in Hong Kong, AlipayHK supports the digital operations of more than 90% of Hong Kong merchants. Under Hong Kong’s open banking framework, AlipayHK also collaborates with the Ant Bank (Hong Kong) to provide more accessible banking services to local consumers.

Eric expressed his optimism for the future. “Hong Kong is already taking the necessary steps to establish a comprehensive set of favorable policies to encourage innovation and build up ecosystems.”

“Walking into the exhibition hall, I felt the energy—a vibrant mix of people from different backgrounds. This new opportunity can further strengthen Hong Kong’s position as a leading financial center.”