Is Hong Kong the ideal testbed for China's plans to make the digital yuan global?
Welcome to The Daily Forkast February 17 2022.
I'm Angie Lau, Editor-in-Chief of Forkast, covering all things blockchain.
Well, Hong Kong has long been known as an international financial hub, and now it's
set to pilot retail cross-border use of the e-CNY.
We're going to take a look at why experts believe the city is an apt choice for testing
international payments using the digital currency, plus a whole lot more coming up.
Let's get you up to speed from Asia to the world.
Join thousands of NFT traders who already start their day on Crypto slam.
Let's kick off with some of the biggest stories coming out of Asia today.
First up, more Crypto and sports bedfellows to tell you about.
Singapore based exchange Bybit is sponsoring Oracle Red Bull's Formula One racing team.
Oracle Red Bull claims it is the largest annual Crypto sports sponsorship to date.
While the scale of the deal has not been officially disclosed, an unnamed source has been cited
in media saying the sponsorship is worth US$150 million over three years.
Bybit is going to work on growing fan engagement by issuing fan tokens, according to data from
Crypto Slam.
That could be a good choice, as all time sales volume for the fan token market as a whole
is approaching US$50 billion.
Meanwhile, two unicorn sightings in South Korea to tell you about two South Korean crypto
exchanges have achieved the billion dollar valuation status.
According to the Ministry of SMEs and Startup, Upbit and Bithumb were among the seven Korean
companies that achieved that status in 2021.
Now, Crypto is hugely popular in the country, with a survey last November finding that 40
percent of South Koreans in their twenties and thirties have already invested in digital
assets.
And while a planned tax on income from digital assets is now delayed to next year, crypto
related campaign policies are expected to play a key role in convincing younger voters
to take part in next month's South Korean presidential election.
You can find those stories and more at Forkast.News.
Now, over in Hong Kong, the city is set to become a testing ground for Chinese authorities
to pilot cross-border payments using the digital one.
And experts say the international city is an ideal choice.
But why?
Forkast.news Timmy Shen reports
Hong Kong's position as a bridge to the world is well established, with a city already a
primary offshore again trading center.
According to the de facto central bank, the Hong Kong Monetary Authority, over 70 percent
of offshore against settlements are made in a city and given its economic and political
nuances.
One expert told Forkast Hong Kong is the obvious choice to pilot cross-border payments with
a digital yuan.
Hong Kong's role in this is that of being a perfect laboratory experiment because it
is both part of China and it is at the same time a part of China with a separate currency
so you can control and not control.
You can see what happens, but nothing is going to happen, which in Hong Kong, which would
destabilize China about e-CNY.
The appointment of the e-CNY will not only improve payment efficiency and reduce costs,
it would also allow Beijing to monitor and manage capital outflows more easily to China.
It doesn't want to do is to see large capital outflows destabilizing the renminbi, whether
it's the e-CNY or the CNY they don't want currency volatility.
Initially limited to the Greater Bay Area encompassing Hong Kong and Macao in Guangdong
province.
Roach says the trial is a precursor to wider implementation of the digital yuan.
This will then open the way to using it in a broader international context.
So Middle East, African, Asian currencies, any currency basically.
For Forkast, I'm Timmy Shen.
For the past three decades, if you were at the Olympics, you only had two choices if
you wanted to buy a T-shirt, a souvenir, you either had to pay by cash or a visa card.
And then the 2022 Winter Olympics began in China, changed things up and introduced the
e-CNY as a third alternative.
Now, with the Games nearing a close, how successful was the move introducing the e-CNY to the
world and a lot to talk about this week in the hot seat, Michael Wu, CEO and founder
of Amber Group, is here to talk about all the latest developments in the New Economy.
Great to see you again, Michael.
Thank you, Angie.
Great to see you.
All right.
Ok, so we got.
Have you been watching the Olympics, Michael?
Not too much.
I've been following on social media, but it's been too busy.
I think that's been the case for the Olympics, but it has been a very interesting Olympics
so far beyond sports.
A lot of netizens have been keeping a close watch not only on the games, but actually
the push for e-CNY.
What's the read as you see it so far?
I think a digital payments is definitely the trend globally.
There are different forms of.
I think, you know, Crypto, as we know it is a major formula it's up and coming.
The other types of digital currency, such as CBDC like e-CNY is also being rolled out.
I think it's a great thing.
It's definitely brings a lot of convenience for the consumer.
Different types of digital currency will have different features.
Some are more decentralized versus the others.
But all in all, you know, I think that's just the inevitable trend as everything moves to
the digital world or digital era.
Well, you know who else is jumping on that bandwagon?
And I never thought that this was going to happen.
The Oracle of Omaha, Warren Buffett himself making a second investment into new bank.
This is, of course, you know, one of those crypto friendly banks, challenger banks that
are in this space.
And he's, he's dumping Visa and MasterCard, and he's going into the Challenger bank business
now.
It's it's a very Crypto friendly bank.
How do you read this move?
You know, increasing his investment stake in potentially a crypto friendly bank.
I think a lot of the trends I've seen being inevitable, such as fintech overtaking traditional
finance and new kinds of neo-banking or in the digital financial services sort of being
proven superior and more effective than legacy banking.
In the case of this investment, I think it's a good investment, and new bank is also one
of the largest and most events in Latin America, which is a very important, a booming economy
that we are also looking very closely at.
It has a huge, hugely digital native young population.
A lot of them don't actually have legacy banking part, but they have internet access.
So instead of having a first bank account now, they have their new bank account.
Well, you know what?
To your point, it is the new economy driven by the new generation and and you know, they're
looking at all of these onboarding vehicles that allow them for wealth generation and
of course, the grandfather of them all.
Let's talk about finally, the latest on bitcoin hash rate had a huge jump to a new all time
high this week, even as Uber CEO said they would accept bitcoin as payment when it becomes
environmentally friendly.
So there's that's a really interesting move in the right direction.
But what is the energy consumption barrier and issue?
Could that still be an obstacle to the use case adoption?
Carbon neutrality, the sustainability is a very, very important topic that I think, you
know, the whole world cares a lot about and bitcoin's proof of work model where, you know,
essentially it converts energy consumption into that battery storage to back the value
behind bitcoin alongside its scarcity and everything.
I think it's a very universal model where enough money comes from storage of energy
that which which which is think about is quite fair and probably more robust than any fiat
based system.
On the other hand, I do think we need to pay attention to to the sustainability investing
side of things.
Far from such a wealthy where you know, they're going to roll all green because green yields
where you know, investors can only invest in bitcoin and other digital assets, they
can actually easily offset their capital.
Impact is a single click,
And it really incorporates that kind of social aspect that a lot of increasingly this generation
and the rest when it comes to investing cares about in the new economy.
Michael, always good to talk to you.
And that's The Daily Forkast from our vantage point right here in Asia.
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For more visit Forkast.News.
I'm Editor-in-Chief Angie Lau.
Until the next time.