TechFlow news, according to Cointelegraph, government-supported research in Hong Kong has indicated that decentralized finance (DeFi) and metaverse technologies will become new opportunities for enhancing the region's global fintech competitiveness. On June 25, the Hong Kong Institute of Monetary and Financial Research (HKIMR), the research arm of the Academy of Finance (AoF) in Hong Kong, released two reports detailing the impact of DeFi and the metaverse on the financial industry.
The report shows that the DeFi market has grown from a market capitalization of $6 billion in 2021 to over $80 billion in 2023, demonstrating its significant potential. However, DeFi remains an underdeveloped market, with more than 70% of crypto companies yet to enter this space. Despite challenges related to governance, compliance, and vulnerabilities, the study remains optimistic about DeFi’s unique characteristics, believing it holds promise for delivering new financial services such as liquid staking, flash loans, and automated market makers.
Regarding the metaverse, while local financial institutions have expressed strong interest, actual participation remains modest. Over 51% of respondents are skeptical about the future potential of the metaverse, although some Hong Kong fintech firms are actively advancing related developments.
Fung Ho Yin, Dean of the Academy of Finance and Executive Director of HKIMR, said: "Emerging technologies such as DeFi and the metaverse, closely tied to broader virtual assets and Web3 development, could bring various opportunities to Hong Kong's financial services industry."
