WEBVTT - Hong Kong’s Wealth Boom and Digital Future 0:00:00.320 --> 0:00:04.440 Hong Kong's financial sector is roaring back to life. In 0:00:04.480 --> 0:00:08.039 the first half of the year, IPO surged, making the 0:00:08.080 --> 0:00:11.720 Cities Exchange number one globally for raising funds on the 0:00:11.720 --> 0:00:15.640 public market. The Hangsing Index is up twenty seven percent 0:00:15.720 --> 0:00:19.440 this year, led by biotech stocks. Hong Kong is also 0:00:19.560 --> 0:00:22.520 driving ahead to become a digital assets hub with the 0:00:22.560 --> 0:00:26.639 new stable coin ordinance. There's also billions in untapped funds 0:00:26.680 --> 0:00:29.680 in China. This has driven a surge and money into 0:00:29.720 --> 0:00:32.880 Hong Kong, with more family officers to manage that flow 0:00:32.880 --> 0:00:35.960 of capital and a new generation of wealth taking over 0:00:36.880 --> 0:00:40.520 risk remain. Of course, the property segment is still depressed 0:00:40.640 --> 0:00:46.519 and geopolitical headwinds persist. You're listening to ASI Eccentric from 0:00:46.520 --> 0:00:50.440 Bloomberg Intelligence. I'm John Lee in Hong Kong and this 0:00:50.560 --> 0:00:54.360 week we're speaking with Vivian cou CEO of Hong Kong's 0:00:54.360 --> 0:00:59.120 Private Wealth Management Association and previously ex head of compliance 0:00:59.160 --> 0:01:02.760 at Goldman Sach. She's also a crypto advocate and on 0:01:02.800 --> 0:01:07.560 the Government Web three task Force for regulatory matters. Vivian, 0:01:07.600 --> 0:01:08.360 welcome to the show. 0:01:08.600 --> 0:01:10.000 Thank you, thanks for having me. 0:01:11.240 --> 0:01:13.280 I wanted to start off by asking you like about 0:01:13.280 --> 0:01:16.240 Hong Kong. Are you surprised that the financial sector has 0:01:16.360 --> 0:01:19.240 rebounded so quickly this year because at the beginning of 0:01:19.280 --> 0:01:21.840 the year there was quite a lot of risks, uncertainty 0:01:21.840 --> 0:01:27.000 regarding geed, political and tariff risks, China's economy was still 0:01:27.040 --> 0:01:27.720 pretty slow. 0:01:28.560 --> 0:01:32.120 I would actually categorize it by talking about the comeback 0:01:32.200 --> 0:01:35.560 started before this year, and then we are seeing a 0:01:35.640 --> 0:01:39.200 gradual progression in terms of how things are recovering. We 0:01:39.360 --> 0:01:42.400 have an ANNU report which we prepare every year. Last 0:01:42.480 --> 0:01:45.560 year was the first year that we see the AUM 0:01:45.720 --> 0:01:49.080 number increasing after a couple of years. And then if 0:01:49.080 --> 0:01:51.400 you look at the statistic that came out from the 0:01:51.480 --> 0:01:54.920 SFC survey this year, which reflected in twenty twenty four, 0:01:55.400 --> 0:01:59.200 we see a very positive increase sort of double digit 0:01:59.400 --> 0:02:03.000 fifteen percent an increase year over years. So I felt 0:02:03.040 --> 0:02:05.440 that the comeback has started last year. Of course, you know, 0:02:05.440 --> 0:02:08.960 there are different factors that would affect how people are investing, 0:02:09.360 --> 0:02:13.080 how company is deploying funds, and how investors choose to invest. 0:02:13.120 --> 0:02:15.520 But I see that that is a progression of different 0:02:15.560 --> 0:02:17.880 things that's happening that's bringing the comeback. 0:02:18.160 --> 0:02:21.240 And just talking about some figures like I'm quoting the 0:02:21.240 --> 0:02:25.360 Boston Consulting Group. They estimate that the cross border wealth 0:02:25.400 --> 0:02:29.480 of Hong Kong is at two point seven trillion dollars. 0:02:29.560 --> 0:02:32.840 Now that's almost the same size. Or it's about to 0:02:32.880 --> 0:02:35.760 overtake Switzerland as the largest offshore WORLTH hub. 0:02:36.000 --> 0:02:39.680 But what's driving all this growth, Well, that's again that's 0:02:39.720 --> 0:02:43.880 probably not a new phenomenon that Hong Kong. It's kind 0:02:43.880 --> 0:02:46.920 of a position to take over Switzerland. You know, Switzerland 0:02:47.040 --> 0:02:50.400 being a historical wealth management hub, you know, have a 0:02:50.400 --> 0:02:53.640 lot that it's providing. But Hong Kong, I think a 0:02:53.639 --> 0:02:56.920 few things that have really changed this year, even post COVID. 0:02:57.360 --> 0:03:00.760 It's this role about super connector you see a more 0:03:00.840 --> 0:03:05.120 flow between Hong Kong, rcion the Middle East, including some 0:03:05.360 --> 0:03:08.960 that we participated in with the government, the delegations and 0:03:09.040 --> 0:03:12.520 even this year alone also Hong Kong, we worked with FSDC, 0:03:13.080 --> 0:03:15.960 they hosted some RCAN delegation. So there's a lot of 0:03:16.000 --> 0:03:19.560 exchange in terms of how outside investment can come in 0:03:19.680 --> 0:03:22.920 and also you know locally, how our own investor can 0:03:22.960 --> 0:03:25.840 invest a broad So that's a lot of different discussion. 0:03:26.000 --> 0:03:29.040 Regimes you know, immigration scheme and the like that are 0:03:29.040 --> 0:03:32.000 facilitating all this discussion and investments cross flows. 0:03:32.240 --> 0:03:34.880 But how much of that money is coming from mainland China. 0:03:35.440 --> 0:03:39.400 Well, our reflected that majority. If we rank in all 0:03:39.400 --> 0:03:43.480 the different regions that we see opportunities on, mainland China 0:03:43.600 --> 0:03:46.160 is definitely on the top. But then our report last 0:03:46.200 --> 0:03:48.360 year talked about, you know, the next one would be 0:03:48.560 --> 0:03:52.240 Arzian like Arsian countries coming in the new corridors being built, 0:03:52.360 --> 0:03:54.880 and the third one is Middle East. So the majority 0:03:54.920 --> 0:03:57.640 of the wealth we see still coming from mainland, although 0:03:57.640 --> 0:04:00.040 there's been some challenges in terms of recovery and in 0:04:00.120 --> 0:04:03.120 terms of how the economy is like in China, if. 0:04:03.080 --> 0:04:06.120 We think of Hong Kong, traditionally the super rich, the 0:04:06.160 --> 0:04:08.920 wealth you have been from the property segment, Like if 0:04:08.960 --> 0:04:10.880 you look at the billionaires of Hong Kong, they're all 0:04:10.920 --> 0:04:11.920 property tycoons. 0:04:12.400 --> 0:04:13.440 But now you look. 0:04:13.320 --> 0:04:15.560 At you all the money coming in from China. You 0:04:15.640 --> 0:04:18.400 see the stock market, like biotech stocks doing really well, 0:04:18.480 --> 0:04:21.880 there's a lot of tech IPOs, which industries is all 0:04:21.920 --> 0:04:23.240 this new wealth coming from. 0:04:23.880 --> 0:04:26.440 I think it has to do with the evolution of 0:04:26.680 --> 0:04:30.760 the different economy China, Hong Kong. Hong Kong, yeah, historically 0:04:30.800 --> 0:04:33.760 known for property development and then China to a lot 0:04:33.800 --> 0:04:36.279 of it. But if you see some of the newer 0:04:36.360 --> 0:04:40.880 generation next generation, a lot of them focuses on technology digital. 0:04:41.279 --> 0:04:44.680 And then again our report last year showed like biotech 0:04:44.720 --> 0:04:47.960 as a top sector that investor invests in virtual asset 0:04:48.000 --> 0:04:51.880 actually like class second and commodities. So I would characterize 0:04:51.880 --> 0:04:55.039 it with a change in investment appetite and or different 0:04:55.080 --> 0:04:58.719 generation they are interested in investing in different things. And 0:04:58.880 --> 0:05:01.720 talking more close on the Hong Kong IPO market, we 0:05:01.760 --> 0:05:05.000 also see some reforms in terms of the Hong Kong Exchange, 0:05:05.240 --> 0:05:09.000 how they're change a listing regime to facilitate you know, 0:05:09.040 --> 0:05:12.520 biotech companies in some of the listing chapters to facilitate 0:05:12.600 --> 0:05:15.159 easier listing in Hong Kong. So that certainly has helped. 0:05:15.920 --> 0:05:18.880 Okay, talking about IPOs, like I recently spoke to the 0:05:18.920 --> 0:05:22.400 Hong Kong Exchange and they said there's over two hundred 0:05:22.440 --> 0:05:25.880 companies waiting to be listed in Hong Kong. You know, 0:05:25.920 --> 0:05:29.240 with all this money being listed, is this being reinvested 0:05:29.320 --> 0:05:30.440 into the local economy. 0:05:31.760 --> 0:05:34.000 I can probably just talk around in terms of what 0:05:34.080 --> 0:05:37.280 I see on what's coming into wealth management. So as 0:05:37.320 --> 0:05:40.560 I mentioned earlier, it's clearly reflected the year over year, 0:05:40.640 --> 0:05:44.560 that's a pretty significant increase. Whether that comes from IPO 0:05:44.760 --> 0:05:48.440 or not. The wealth management market, a lot of the revenue, 0:05:48.560 --> 0:05:51.279 what we call transaction revenue, does come from IPO market, 0:05:51.480 --> 0:05:53.359 So I would say that, you know a portion of 0:05:53.400 --> 0:05:55.880 that is definitely coming in into wealth management. But again 0:05:56.000 --> 0:05:58.680 some listed here they might be looking for dual listing. 0:05:58.800 --> 0:06:02.559 You know, Hong Kong, it would be a reasonable place, 0:06:02.600 --> 0:06:06.320 would be very mature sort of finance infrastructure to be 0:06:06.360 --> 0:06:08.840 listening here. You know, we're a free market. And we 0:06:08.920 --> 0:06:11.440 also just got back in terms of the Investment Index 0:06:11.600 --> 0:06:15.080 Global index, I believe number three, like in the top three, 0:06:15.400 --> 0:06:17.839 and that's kind of moved up also in the recent 0:06:17.839 --> 0:06:21.200 few years. And if you look at women touched on 0:06:21.279 --> 0:06:23.960 this a bit later or not on family offices, you know, 0:06:24.040 --> 0:06:26.080 some of the family office that decide to come to 0:06:26.120 --> 0:06:28.760 Hong Kong also is because of the package of our 0:06:28.839 --> 0:06:33.040 immigration about that concession and other factors that they like 0:06:33.160 --> 0:06:35.440 to move to Hong Kong and come to invest here. 0:06:35.920 --> 0:06:37.800 Well let's talk about it now. So with all this 0:06:37.960 --> 0:06:41.120 new money coming into Hong Kong, is this being managed 0:06:41.160 --> 0:06:44.960 by like said, private banks, Is it like family officers. 0:06:45.320 --> 0:06:48.719 So the range of different investors that we see. Our 0:06:48.760 --> 0:06:52.039 association deals well with a private bank, so we kind 0:06:52.040 --> 0:06:54.600 of interact with them more. But we also work with 0:06:55.240 --> 0:06:57.479 family office Hong Kong for example. They are the ones 0:06:57.520 --> 0:07:00.279 that who goes out pretty aggressively. No mandate by the 0:07:00.279 --> 0:07:03.880 government with specific APIs on how many single family office 0:07:03.920 --> 0:07:05.640 for them to bring it in Hong Kong. We have 0:07:05.680 --> 0:07:09.080 a live example. We just admitted one of the pretty 0:07:09.120 --> 0:07:13.520 sitable US fund managing over eight hundred billion. They're a 0:07:13.680 --> 0:07:17.760 family sort of fund and they have establishment in Singapore, 0:07:18.160 --> 0:07:20.040 not yet in Hong Kong. They were actively looking at 0:07:20.080 --> 0:07:22.040 it and they just joined it as a member. So 0:07:22.080 --> 0:07:24.000 it kind of shows their confidence or at least they 0:07:24.000 --> 0:07:26.640 think that they're definitely opportunity that they feel there is 0:07:26.640 --> 0:07:30.240 in Hong Kong. Otherwise. We also work very closely in 0:07:30.320 --> 0:07:33.400 giving feedback on things like tax concession. You know, if 0:07:33.640 --> 0:07:36.200 you have family office coming, like if you look at 0:07:36.240 --> 0:07:39.040 the different brackets of the amount that will qualify for 0:07:39.120 --> 0:07:42.560 tax exemption family offices Hong Kong is lower than Singapore 0:07:42.720 --> 0:07:45.240 or Dubai, you know, we always get compared. These are 0:07:45.280 --> 0:07:48.080 two very calm and comparable in terms of jurisdiction that 0:07:48.120 --> 0:07:49.200 people compare us with. 0:07:49.800 --> 0:07:51.720 So in your position, you'd be able to see, like 0:07:51.880 --> 0:07:54.600 all the creation of new family officers, you're saying, there's 0:07:54.600 --> 0:07:56.040 still a lot to be created. 0:07:56.440 --> 0:07:59.400 Family office it can of a lose to them in 0:07:59.440 --> 0:08:02.040 a lot of sense. I think single family officers, you know, 0:08:02.080 --> 0:08:04.600 they're basically at the wealthy families. You know, they have 0:08:04.720 --> 0:08:07.280 our own team that manages the well and they're what 0:08:07.280 --> 0:08:10.320 you call the external asset managers. They are more usually 0:08:10.440 --> 0:08:13.840 like traditionally X banking professionals and that they have set 0:08:13.920 --> 0:08:16.680 up their own shop to manage money. So they're kind 0:08:16.680 --> 0:08:19.440 of two different sets, the single family officers. If you 0:08:19.520 --> 0:08:22.119 look at the latest Hong Kong report also the tracking 0:08:22.200 --> 0:08:25.360 numbers of how many I believe even this year alone 0:08:25.360 --> 0:08:28.200 there maybe fifty like so far, I think fifty that 0:08:28.560 --> 0:08:30.880 has he either KNW that's been set up or is 0:08:30.960 --> 0:08:33.520 expanding their presence in Hong Kong. So those are all 0:08:33.679 --> 0:08:34.320 very positive. 0:08:34.360 --> 0:08:39.199 Science Asia Centric is produced by Bloomberg Intelligence. We're more 0:08:39.240 --> 0:08:43.000 than five hundred experienced analysts and strategists work around the 0:08:43.000 --> 0:08:46.480 clock to bring you timely, world class research. Our coverage 0:08:46.480 --> 0:08:51.000 spans two hundred market industries, currencies, commodities and industries, as 0:08:51.000 --> 0:08:54.000 well as over two thousand equities and credits. To learn 0:08:54.040 --> 0:08:58.400 more about Bloomberg Intelligence, visit bi go on the Bloomberg terminal. 0:08:58.960 --> 0:09:01.479 If you like what you're here, don't forget to subscribe. 0:09:01.480 --> 0:09:05.080 And Shair I wanted to talk about the opportunity from 0:09:05.120 --> 0:09:08.720 mainland China. Now that's been a traditional source of the 0:09:08.720 --> 0:09:12.480 fundraising for family officers and wealth management. Like how much 0:09:12.559 --> 0:09:13.520 more is there to go? 0:09:14.320 --> 0:09:17.319 That's like a million dollar question. I think some of 0:09:17.360 --> 0:09:21.040 the challenges hasn't really changed, probably in decades. It's, you know, 0:09:21.080 --> 0:09:23.840 the ability to move funds offshore because a lot of 0:09:23.840 --> 0:09:27.200 these wealthy individuals, you know, they probably are very wealthy 0:09:27.320 --> 0:09:30.640 already in China, but you know, how are they able 0:09:30.679 --> 0:09:33.800 to do they already have funds offshore. That's usually a 0:09:33.840 --> 0:09:37.120 big factor. I mean, if they are wealthy early on 0:09:37.160 --> 0:09:39.880 they decided, you know, they want to expand internationally in 0:09:39.920 --> 0:09:43.040 different businesses, they probably already have funds offshore. But the 0:09:43.080 --> 0:09:45.560 Connect scheme, for example, you know, the wealth connect scheme, 0:09:45.600 --> 0:09:48.240 which is a huge focus of our industry. We have 0:09:48.360 --> 0:09:51.320 been loving for some time that the quota right now 0:09:51.520 --> 0:09:54.360 doesn't really surface purpose yet because there's only three million 0:09:54.600 --> 0:09:58.600 dollars in rem and Bee, and if China consider revising 0:09:58.640 --> 0:10:01.520 the limits or make the next enhancement, we are strongly 0:10:01.559 --> 0:10:04.360 advocating that it should be a much higher number because 0:10:04.760 --> 0:10:07.640 the sort of general account opening sides or even professional 0:10:07.640 --> 0:10:10.600 investor is at a one million US level. So we 0:10:10.679 --> 0:10:13.760 would hope that's something that we can aspire to work 0:10:13.800 --> 0:10:15.240 with the regulators and the government on. 0:10:15.880 --> 0:10:18.199 We did sort of touch on like the next generation 0:10:18.320 --> 0:10:20.760 of wealth. There's been a lot of publicity on how 0:10:20.840 --> 0:10:23.880 much wealth is being I guess like transferred from like 0:10:23.960 --> 0:10:27.360 the founders to the second sometimes the third generation. You 0:10:27.400 --> 0:10:31.160 know they are often Gen Z or millennials. Tell us 0:10:31.160 --> 0:10:33.000 about this segment, how the needs different. 0:10:33.280 --> 0:10:36.199 It's a great question because even within the association itself, 0:10:36.720 --> 0:10:38.920 never a clear definition of what the next gen is. 0:10:39.200 --> 0:10:42.120 Next gen is usually, you know, the most common character 0:10:42.160 --> 0:10:46.000 you characterize them with more tax savvy. That's why we 0:10:46.880 --> 0:10:49.320 in our report last year, the one to five million 0:10:49.360 --> 0:10:52.840 segment was one that we think would have more explosive growth, 0:10:53.400 --> 0:10:56.920 primarily because they can be served by banks. But then 0:10:57.400 --> 0:10:59.880 a lot of banks now actually also have tach plat 0:11:00.559 --> 0:11:04.800 where you provide technology that I think those younger generations 0:11:04.800 --> 0:11:08.319 can invest themselves, so some of other setup like robot 0:11:08.320 --> 0:11:11.080 advisors or tech companies that they are more and more 0:11:11.120 --> 0:11:13.360 that serves with that segment. So we felt that that 0:11:13.559 --> 0:11:18.199 segment will have more ways to invest and also some 0:11:18.280 --> 0:11:22.280 of them, particularly next gen for wealthy families, they look 0:11:22.320 --> 0:11:25.440 at impact investing or you know, is what they do 0:11:25.640 --> 0:11:28.840 meaningful because they are very wealthy. But how they want 0:11:28.880 --> 0:11:31.480 to spend the funds. Do they want to invest in 0:11:31.559 --> 0:11:34.520 things that would be more climate friendly because they truly 0:11:34.559 --> 0:11:38.600 believe that in the whatever twenty years, if more damage 0:11:38.640 --> 0:11:40.800 is done to the planet, then that affects the way 0:11:40.840 --> 0:11:42.959 that they live. So they have a different mentality into 0:11:43.000 --> 0:11:44.640 how they want to spend money and invest. 0:11:45.160 --> 0:11:48.840 And are they also more amenable to sort of new products. 0:11:48.960 --> 0:11:52.240 I'd imagine the old generation would be much more amenable 0:11:52.280 --> 0:11:56.320 to like the sixty forty equity on portfolio. But are 0:11:56.360 --> 0:11:59.280 they more willing to invest in things like in a 0:11:59.320 --> 0:11:59.960 digital asset. 0:12:00.840 --> 0:12:04.200 That's certainly a big trend because this was probably a 0:12:04.200 --> 0:12:06.160 couple of years back. But when they look at the 0:12:06.280 --> 0:12:09.920 age group that obviously is most savvy or most interesting 0:12:10.000 --> 0:12:12.440 in digital asset is usually like below thirty five. But 0:12:12.760 --> 0:12:16.800 I see that changing with this cycle, you see much 0:12:16.800 --> 0:12:20.240 more institution participating in the virtual asset space. That's why 0:12:20.280 --> 0:12:23.800 when you look closer to Hong Kong about Stable Point Ordinance, 0:12:24.200 --> 0:12:28.120 about the virtual asset framework the SFC put out as fire, 0:12:28.200 --> 0:12:31.000 you know, some of these framework is really to kind 0:12:31.000 --> 0:12:34.880 of make traditional finance and the financial technology sector converge. 0:12:35.200 --> 0:12:38.520 So I see that now there will be more offerings 0:12:38.520 --> 0:12:41.240 that would be more simple, that you would allow a 0:12:41.320 --> 0:12:44.520 more layman to invest in. I think this cycle that 0:12:44.640 --> 0:12:47.120 would probably change as a trend that in the past, 0:12:47.400 --> 0:12:51.040 primarily it will be younger generation investing in virtual assets. 0:12:51.080 --> 0:12:55.200 But I see that depending on what country, because more 0:12:55.320 --> 0:12:57.920 undeveloped country usually you have a higher adoption. So the 0:12:58.000 --> 0:13:02.760 unbanked population usually have a higher interest in virtual assets 0:13:02.760 --> 0:13:05.520 because you just need a computer, a phone, you don't 0:13:05.520 --> 0:13:07.760 really need a back account to transact a lot of 0:13:07.800 --> 0:13:11.960 them transaction tokens. And then more unstable countries also seem 0:13:12.000 --> 0:13:12.760 to have higher adoption. 0:13:13.320 --> 0:13:16.680 So Vivian obviously the CEO of Hong Kong's Private Wealth 0:13:16.720 --> 0:13:20.200 Management Association, But as we mentioned previously, you do have 0:13:20.280 --> 0:13:23.320 another HAD and you are on the Government Web three 0:13:23.360 --> 0:13:27.680 task Force. Were you intimately involved in the stable coin 0:13:27.800 --> 0:13:29.439 audience that just passed in August. 0:13:29.840 --> 0:13:32.840 I wouldn't say I was intimately involved. We definitely gave feedback. 0:13:33.120 --> 0:13:37.439 And then this goes before PWMA. So before PWMA, I 0:13:37.480 --> 0:13:41.440 was running another association which helped crypto companies to do advocacy. 0:13:41.800 --> 0:13:44.640 So when I met with the HMA, they said we 0:13:44.640 --> 0:13:47.280 were the first crypto association that went with them, and 0:13:47.360 --> 0:13:49.760 that was when they first started thinking about stable point. 0:13:49.920 --> 0:13:52.000 I'm guessing that had to go back to prob the 0:13:52.040 --> 0:13:55.840 twenty twenty two twenty three because at that point the 0:13:56.280 --> 0:14:00.200 regulatory framework wasn't as developed. For example, the SFC and 0:14:00.240 --> 0:14:02.640 the AMY are still looking at what they will respectively 0:14:02.760 --> 0:14:06.560 be responsible for stable coin. You know, I think people 0:14:06.760 --> 0:14:09.280 understand that it will be used for payment rails, but 0:14:09.320 --> 0:14:11.560 then there's a big suitability aspect as in, you know, 0:14:11.600 --> 0:14:14.920 it's a suitable for retail professional So at that time 0:14:14.960 --> 0:14:17.600 it wasn't as developed, should I say, But fast forward, 0:14:18.120 --> 0:14:21.840 you know, I think the whole Hong Kong got very excited. Also, 0:14:21.880 --> 0:14:24.520 I think that drew on what's happening in the US 0:14:24.560 --> 0:14:27.840 as well, with the Genius Act, which also focuses on 0:14:27.880 --> 0:14:29.480 like giving licensing for sable cooin. 0:14:29.960 --> 0:14:32.520 Yeah, So the US Genius Act was passed in July, 0:14:33.000 --> 0:14:35.360 and I believe just a couple of weeks later, Hong 0:14:35.440 --> 0:14:37.880 Kong passed the stable coin audience I believe on the 0:14:37.920 --> 0:14:41.280 first of August. So it's it was really quick. I 0:14:41.280 --> 0:14:44.640 think the market was really surprised at how fast Hong 0:14:44.720 --> 0:14:47.880 Kong moved on this, Like what is this signal to 0:14:47.880 --> 0:14:49.840 the market that you know, Hong Kong wants to be 0:14:49.880 --> 0:14:52.040 a leader in this space, like tell us. 0:14:52.040 --> 0:14:54.040 Well, the government is loud and clear on that point. 0:14:54.480 --> 0:14:56.760 They want to build Hong Kong into a digital ass 0:14:56.760 --> 0:14:59.640 at hub. And the appetite you put a framework on 0:14:59.680 --> 0:15:02.160 table coin has been in the pipe, as I mentioned, 0:15:02.200 --> 0:15:04.160 you know, since we first interacted, because there was an 0:15:04.200 --> 0:15:07.480 early consultation that came out on that and there was 0:15:07.480 --> 0:15:10.000 a sandbox that quite a number of companies had gone 0:15:10.040 --> 0:15:12.520 into in terms of stable coin, but it was, as 0:15:12.560 --> 0:15:15.920 you said, not until August where the sort of legal 0:15:15.920 --> 0:15:19.600 framework came out. Right now, I think you probably saw 0:15:20.000 --> 0:15:22.880 HAMA and SFC put out also an alert telling people 0:15:23.000 --> 0:15:25.920 not to get so excited about stable coin, because of 0:15:25.960 --> 0:15:28.360 course there's a lot of potential. You know, IMF had 0:15:28.360 --> 0:15:30.840 a report just said that twenty twenty four the two 0:15:30.880 --> 0:15:34.120 trillion of stable point volume. So that's a big number 0:15:34.320 --> 0:15:37.440 that people are excited about. But stable cooin is not 0:15:37.600 --> 0:15:40.600 like bitcoin, for example, or ethereum. It's fairly it's not 0:15:40.640 --> 0:15:43.280 going to go up the way it does. And then 0:15:43.320 --> 0:15:45.720 if you look at the requirements as well, it's fairly 0:15:45.760 --> 0:15:49.120 difficult to comply. And I think that's done for purpose 0:15:49.160 --> 0:15:53.160 with investive protection in mind. So I'm sure HMA doesn't 0:15:53.200 --> 0:15:55.320 just want to give the license to any company. So 0:15:55.520 --> 0:15:57.920 one of the ones that are our member for Cena Charter, 0:15:58.040 --> 0:16:00.880 for example, they're the first one that now said they're 0:16:00.880 --> 0:16:02.800 going to issue a Hong Kong dollar back stable coin 0:16:03.320 --> 0:16:06.840 with a JV with Animalka, with Hong Kong Telecom. So 0:16:07.320 --> 0:16:11.160 some of those larger brands, more reputable firms, I'm sure 0:16:11.360 --> 0:16:13.560 actually would be one of the first batch that that 0:16:13.680 --> 0:16:14.560 get our license. 0:16:14.920 --> 0:16:18.360 Yeah, we just literally interviewed Animoka a couple of weeks 0:16:18.400 --> 0:16:21.200 ago on stable coins. But I wanted to get your view. 0:16:21.320 --> 0:16:24.000 Is there much of a difference between the rules and 0:16:24.080 --> 0:16:27.440 laws of say the Genius Act versus Hong Kong's stable 0:16:27.480 --> 0:16:28.200 Cooin Ordinance. 0:16:28.320 --> 0:16:32.360 Oh huge, Yes, there are two different two very different frames, 0:16:32.360 --> 0:16:34.360 although you know they both touch on stable coins. So 0:16:34.880 --> 0:16:36.680 number one, if you look at things like the capital 0:16:36.720 --> 0:16:40.680 and the liquiditive requirement, Hong Kong has very specific requirements 0:16:40.680 --> 0:16:43.760 that what needs to be backed by and it can 0:16:43.800 --> 0:16:45.880 be in different currency. You know, REM and B would 0:16:45.880 --> 0:16:47.720 be one of them. Can be on US dollars, you 0:16:47.800 --> 0:16:50.000 can be Hong Kong dollars Genius Act for the US 0:16:50.080 --> 0:16:52.760 one you can only denominated in US dollars and I 0:16:52.800 --> 0:16:55.760 won't sort of go through odo technicalities, but they are 0:16:55.760 --> 0:16:58.680 a different level of regulation for the Genius Acts. So 0:16:58.800 --> 0:17:01.360 if you are sort of a bigger setup, then you 0:17:01.520 --> 0:17:05.320 get regulated at the federal level. It was a smaller 0:17:05.320 --> 0:17:07.760 one that you get regulated by the state level. It 0:17:07.840 --> 0:17:11.080 kind of draws on interesting questions on would the traditional 0:17:11.119 --> 0:17:13.679 banks be applying for those you know, who would be 0:17:13.720 --> 0:17:16.560 the first one? You know, Circle ANETA would be the 0:17:16.600 --> 0:17:18.920 first two. That's because in circulation right now in terms 0:17:18.960 --> 0:17:22.280 of volume, but they're well known, you know Circle when listed, 0:17:22.680 --> 0:17:26.240 so they're different regime and the Genius Act it also 0:17:26.280 --> 0:17:29.679 got rolled out quite quickly. But the whole infrastructure that 0:17:29.680 --> 0:17:31.800 the US is developing is going to be a multi 0:17:31.880 --> 0:17:35.520 year long infrastructure so for people to even apply and 0:17:35.600 --> 0:17:39.199 look at all the jurisdictional consideration on the size, you know, 0:17:39.240 --> 0:17:42.320 on volume and whatnot, it will take some time. Whereas 0:17:42.440 --> 0:17:45.680 I kind of see Hong Kong would have some major 0:17:45.880 --> 0:17:48.840 player that would get licensed in the shorter term. 0:17:49.160 --> 0:17:52.160 So when do you think these licenses will be announced? 0:17:54.040 --> 0:17:57.240 I think that's more of ahma question. But they would 0:17:57.280 --> 0:18:01.200 be incentifized, you know, if those more putable firms can 0:18:01.280 --> 0:18:03.600 meet the requirements to kind of put them in action, 0:18:03.720 --> 0:18:06.880 because that would be a great branding opportunity for Hong Kong, 0:18:07.040 --> 0:18:08.880 you know, to be one of the first one who 0:18:08.920 --> 0:18:12.000 approved like a sable coin issuer out of Hong Kong 0:18:12.119 --> 0:18:15.240 and also on Hong Kong dollar nominated for example. So 0:18:15.600 --> 0:18:17.119 I don't think it's going to be years. I mean 0:18:17.160 --> 0:18:18.000 you talking about. 0:18:17.760 --> 0:18:20.280 Months, and with these stable coins in Hong Kong, there 0:18:20.280 --> 0:18:23.960 have to be one hundred percent back by that feared currency, right, Well. 0:18:23.760 --> 0:18:25.400 There's a range of different things. I mean, it cand 0:18:25.400 --> 0:18:26.960 of get listed out in the requirement, so it can 0:18:27.000 --> 0:18:29.280 be US treasury, it can be things that are liquid 0:18:29.600 --> 0:18:33.879 and safe. Because if you remember Luna. I don't know 0:18:33.880 --> 0:18:36.720 if everybody remember Luna like I did, but the last 0:18:36.960 --> 0:18:40.080 big stable coin crash called Luna, which you know went 0:18:40.119 --> 0:18:43.480 down ninety percent, so people realize tablecoin actually isn't that stable. 0:18:43.880 --> 0:18:47.560 After that, everybody drew reference that was l go back 0:18:47.640 --> 0:18:51.119 stable coin that all the different jurisdiction at least a 0:18:51.200 --> 0:18:54.920 larger one, and Hong Kong included. They would only consider 0:18:55.119 --> 0:18:58.159 a list of very narrow range of what can be backed, 0:18:58.359 --> 0:18:59.840 and it has to be liquid, it has to be 0:19:00.440 --> 0:19:02.679 so it's only a very narrow range of what it 0:19:02.720 --> 0:19:04.720 can be used to back, viet being one of them. 0:19:04.960 --> 0:19:07.840 And is that more stringent than the US genie sect. 0:19:07.920 --> 0:19:10.600 I think it's different. It's kind of comparable and different. 0:19:10.920 --> 0:19:13.800 I think the idea would be there comparable because it 0:19:13.840 --> 0:19:16.240 still needs to be back by something that has liquidity 0:19:16.320 --> 0:19:19.400 and safe. But the US has a broader poor things 0:19:19.400 --> 0:19:21.000 that you can use to back the stable cooin. 0:19:21.400 --> 0:19:25.199 Okay, listening to the comments from the Trump administration and 0:19:25.280 --> 0:19:28.880 in particular Treasury Secretary Scott Besson, now one of the 0:19:28.920 --> 0:19:32.160 aims of the genie sect seems to be to maintain 0:19:32.680 --> 0:19:35.639 the hegemony of the US dollar, to make sure that 0:19:35.800 --> 0:19:40.080 you know US dollar is dominant in transactions in trade finance. 0:19:40.480 --> 0:19:41.800 What's Hong Kong's angle. 0:19:42.480 --> 0:19:44.920 Well, there are a few different angles you can look at. 0:19:45.160 --> 0:19:47.480 I think in just looking at as a payment mail, 0:19:47.680 --> 0:19:50.840 you know it has fastest settlement, cheaper all that is 0:19:50.880 --> 0:19:54.320 actually kind of a positive thing. But people also look 0:19:54.320 --> 0:19:56.879 at you know, if I want to achieve that, do 0:19:56.960 --> 0:19:58.880 I have to use stable coin? Can I use other 0:19:58.960 --> 0:20:01.360 tokens to achieve that? That's why I think a lot 0:20:01.359 --> 0:20:04.119 of people looking at should we tokenize the money market 0:20:04.160 --> 0:20:06.520 once or do we use savil point to back it? 0:20:06.800 --> 0:20:09.160 So of course saverle point, if you use it under 0:20:09.280 --> 0:20:12.640 properly regulated is sure then it's safer because as you said, 0:20:12.640 --> 0:20:15.320 it's one for one back. The volatility is supposed to 0:20:15.359 --> 0:20:18.479 be much lower than if you used to token, but 0:20:18.560 --> 0:20:21.480 it largely depends on how the circulation is. You know, 0:20:21.480 --> 0:20:23.600 where you can use it. It's a bit like you know, 0:20:23.840 --> 0:20:26.000 if I create own token, it can only be used 0:20:26.000 --> 0:20:28.480 in my own company. What's the point of it? So 0:20:28.640 --> 0:20:31.719 the Hong kongole Bank, stable Point, or even with other denominator, 0:20:31.840 --> 0:20:34.000 the idea is you can break through a lot of 0:20:34.040 --> 0:20:37.359 this cross border payment rail or other things that you 0:20:37.400 --> 0:20:40.439