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Hong Kong Securities and Futures Commission joins R3 blockchain consortium
Hong Kong regulator 'Hong Kong Securities and Futures Commission' has announced that it has joined R3CEV blockchain consortium. The regulator is working with the consortium member banks and technology providers in order to explore blockchain ledgers to record and settle securities and futures transactions, Charley Cooper, managing director of R3, stated.
According to the reports by Wall Street Journal, the addition of HK Securities and Futures Commission to the blockchain consortium formalizes the work that the two groups have done in the past including proofs-of-concept to show the potential of blockchain technology in real financial systems.
“Collaboration between banks and regulators is important for moving blockchain technology out of labs and into mainstream financial systems,” Cooper said. “Both sides need to understand why this tech works and what needs to be changed to make it comply.”
Oliver Bussmann, a fintech consultant and former CIO of UBS Group AG who led testing of the blockchain technology at UBS Group AG before he left last year stated that various financial services companies say blockchain can speed up and cut the costs of transactions. He added that only a few have put systems into production as regulators in the U.S. and other countries have not set out clear guidelines regarding its potential use cases.
“Regulatory and government bodies in other countries, including Canada, Hong Kong, Singapore and the United Kingdom, have collaborated on blockchain tests, putting those areas ahead of the U.S. The U.S. is about one year behind, compared to other jurisdictions,” Bussmann stated.
Hong Kong regulators have established a fintech office as well as a ‘sandbox’ for fintech firms and startups in order to test the distributed ledger technology for regulatory compliance. This fintech office also covers the costs that are associated to run such programs, Cooper added.
The blockchain consortium has also collaborated with Canada’s central bank to explore a digital version of the Canadian dollar on a blockchain ledger, which is very similar to how bitcoins are traded.