Ba Shusong: Digital RMB helps Licaitong

Professor Ba Shusong believes that the launch of Licaitong may face some problems, including cross-border KYC (Know Your Client), investment quota and investable products. Because digital renminbi has traceability and smart contract functions, and at the same time it needs to be processed by the bank during exchange, it can meet KYC requirements, and it can limit funds to only invest in some financial products to control the quota. Therefore, the above problems can be considered through the issuance of digital renminbi. Solved, but the specific solution is still to be considered.

Grasp the leading advantage of RMB application

In addition, according to reports from different agencies, China’s total GDP will surpass that of the United States around 2030. As the world’s largest economy, China’s finance, especially the internationalization of the renminbi, needs to accelerate its development. Although Hong Kong has a leading advantage in promoting the application of the renminbi, in the future, the renminbi will further open up the quota for investment in overseas products. By then, Hong Kong will have to compete with other international financial institutions. Central competition, if it fails to provide an attractive RMB application program, Hong Kong will lose the opportunity.

The development of financial technology is an inevitable trend

Professor Ba Shusong said that before attracting a large number of Chinese companies to come to Hong Kong for listing, Hong Kong was a relatively local market. However, at that time, international funds wanted to enter the mainland market without channels, and mainland companies also wanted to go out and absorb international funds. Therefore, at that time, some professionals used their innovative capabilities to allow more Chinese-funded companies to list in Hong Kong. Later, the Shanghai-Shenzhen-Hong Kong Stock Connect and listing were launched. Reforms have allowed more Chinese concept stocks to choose to return to Hong Kong for secondary listings when Sino-US relations are strained. He also said that when the Shanghai-Hong Kong Stock Connect and listing reform ideas were first put forward, they were still questioned by some markets. From this point of view, young people should be encouraged to not fear doubts and continue to explore more innovative solutions.

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Professor Shusong Ba also mentioned that the development of financial technology will change the entire financial market, including securities, banking, and supervision. Now some banks with high valuations will emphasize their investment in technology. Regarding the recent supervision of technology in the Mainland, he believes that the supervision is reasonable, and that the future development of financial technology is inevitable, and only continuous financial technology innovation will give traditional banks the incentive to change.

Professor Ba Shusong took payment services as an example. In the past, the gross profit of payment services was very low, and banks did not pay attention to it. As technology companies started from low-margin payment services and became giants, current financial technology companies continue to be exposed to different businesses, such as risks. For pricing, financial professionals should have a sense of crisis. The Hong Kong Stock Exchange is also studying the application of blockchain in the background so that transactions and background services can be completed at the same time.

Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.