Blockchain technology is one of the elements of the current Fintech paradigm that is changing the way our society defines money and organisations. Blockchain applications may not often be a revolution. Nevertheless, digital currencies have a disruptive potential as technology power based on the decentralization of trust. Taking into consideration the ethics of fintech and blockchain, we will look at trust as one of the key ethics principles together with proximity, accountability, privacy and cultural lag. Then, we will introduce the ethical paradigm shift of fintech & blockchain and discuss the technological power of digital currencies.
Trust: Because of the decentralized characteristic of Bitcoin and other cryptocurrencies, it’s difficult for the general public to trust their use since there is no central authority. That’s why blockchain stakeholders are working with the financial regulators to create a trustful framework to avoid money laundering, frauds and other associated risks.
Proximity: The rise of stablecoins is fostering the adoption of cryptocurrencies because they are pegged to fiat currencies. People feel more comfortable using digital money that they are familiar with since they already transfer it online although it’s not based on blockchain.
Accountability: The launch of cryptocurrencies by large TechFins companies raise the issue of their responsibility since it may affect traditional currencies and the whole economy.
Cultural lag: Blockchain has revolutionary potential to change the world trade and monetary organisations, but it will take more time for companies and people to adopt the new system.
Privacy: Privacy may be the central issue in the long term since the blockchain is immutable. The risk is that everyone can access your information, or at least your pseudonym, in the public blockchain, in other words, a decentralised power. On the contrary central organisation may be able to monitor all your information in a private blockchain that allows to control the decentralised power of people.
I recommend you to join the online course FinTech Ethics and Risks from HKU FinTech to know more about those 5 Key Ethics Principles with concrete examples in Fintech including Blockchain, Cybersecurity, Artificial Intelligence as well as technological decentralization.
This article is part of the Ethics of Fintech & Blockchain series
Hong Kong and Singapore are competing to become the leading Asia-Pacific Fintech Hub. The Fintech ecosystem had a busy month in November with the Hong Kong Fintech Week and Singapore Fintech Festival. The innovation hubs are also trying to become the leading place to launch a blockchain for business gathering several communities, conferences, festival, and meetups. Hong Kong has even welcomed two major blockchain events in March with the Hong Kong Blockchain Week and Asia Crypto Week that focused more on cryptocurrencies.
These events highlight different approaches to develop new applications based on blockchain following the bitcoin and cryptocurrency bubble that has burst last year. On the one hand, the blockchain ecosystem still focuses on the competition between blockchain platforms, mainly based on a cryptocurrency funded by an ICO (Initial Coin Offering). On the other hand, STO (Security Token Offering) may take centre stage in 2019 to raise funds and to digitise illiquid assets. Finally, a consortium approach based on private blockchains has led to concrete applications in finance most of the time.
We are still at the inception of the blockchain technology to build the next FinTech: Global “Open Finance” Infrastructure. This new paradigm is led by Global Fintech Hubs, such as Hong Kong and Singapore in Asia-Pacific, that can scale through blockchain to connect with other hubs. The deployment of digital finance platforms based on Distributed Ledger Technology is one of the first use cases whereas the tokenisation and traceability of assets in various sectors will spread fintech solutions based on enterprise blockchain and Web 3.0 standards through the whole economy.
I share my overview of a Global Fintech ecosystem based on Blockchain as follow:
There is an increasing number of workshops and online courses dedicated to creativity, new technologies, innovation and design thinking which are crucial knowledge for sustaining the competitive advantages of firms. People who learn those soft skills and new competencies, altogether with creative and knowledge-based workers (artists, scientists, engineers, entrepreneurs), are representative of the creative class which is described by Richard Florida as the leading force of growth in the economy. Those creative professionals are essential for the attractiveness of cities that we can call “Creative Technology Cities” or “CreaTech Hubs”.
Major Tech Hubs from all around the world cover almost any tech vertical based on digital and key enabling technologies. San Francisco, well known for web technologies, has moved towards BioTech and CleanTech. Moving over FinTech, CreaTech and DeepTech are tech trends taking off in London. CreaTech is a new core vertical promoted by the British Creative Industries Council which hosted the festival Createch 2017 to highlight sectors like fashion, games, design or media. Keeping in mind the wider range of the creative class, we should define CreaTech as a fuller spectrum of Creative and Tech insights.
CreaTech Hubs are cities at the core of the creative economy, a concept defined by John Howkins to bring together ideas about the creative industries, the cultural industries, creative cities, clusters and the creative class. In this way, CreaTech is a new paradigm that involves creativity, innovation and design at the intersection of technology to transform traditional sectors from RetailTech to Fintech. The digital transformation and smart cities are the factors of this incremental innovation process which, altogether with DeepTech (disruptive innovation based on substantial scientific advances), create innovation spaces.
When I arrived in Hong Kong almost two years ago, the local startup community was booming with the first edition of the RISE Conf 2015. The number of startups has increased by 24% between 2015 and 2016, according to a Hong Kong’s startup ecosystem survey led by StartMeUp, and has doubled from 1,000 in 2014 to 2,000 in 2016. Many founders from overseas choose the city as a hub to start or expand their business in Asia with communities such as the French Tech Hong Kong. There are also more and more locals among the founders, 63% in 2016 compared to 50% in 2015.
To gather the StartupsHK community, InvestHK organises an annual, one-week startup event StartMeUpHK Festival. The aim is to promote and encourage Hong Kong’s startups to showcase the city’s vibrancy, lifestyle and business scene. Among other startup events, another highlight is the Startup Weekend Hong Kong. I organised the last Startup Weekend which dedicated to healthcare and biotechnologies in partnership with HKUST students. Still, I think that the lack of a culture of innovation is an issue although universities are trying to foster more entrepreneurship and technology transfer.
The Greater Bay Area (Guangdong – Macau – Hong Kong) is an excellent opportunity for the Hong Kong tech hub to tap into one of the largest markets in the world, similar to Tokyo or San Francisco, and to benefit from the complementarity with Shenzhen. The government is planning to develop the Lok Ma Chau Loop at the border of both cities into a Hong Kong – Shenzhen Innovation and Technology Park. I recommend you to read Benjamin Joffe’s point of view about this “ShenKong metropolis” that blends electronics, finance, and healthcare.
I share my overview of the Hong Kong – Shenzhen Innovation Hub as follow:
After launching the French Tech Hub in Hong Kong with French entrepreneurs in 2016, I have come to find a new angle to talk about technology and startups, which prompted this new website createch.io. Crea Tech came to my mind because it represents the entrepreneurial and creative sides of the technology that should be seen at the intersection of business and design. The event VivaTech, which aimed to become the leading event in Europe dedicated to startups and technology, hence particularly interesting because it seemed to encompass the concept of creative technology.
Viva Technology Paris was organised from 30th June – 2nd July 2016 by Publicis and Les Echos for the first edition. The event gathered 2 500 startups to have a booth and join different challenges. I discovered promising startups through the spaces organised around several thematic labs (Automotive Tech, Fintech, Insurtech, Retail Tech…) at the event. Other areas were dedicated to Venture Capitalists, individual French Tech champions such as Devialet, global international leaders, local innovation centers and of course La French Tech.
VivaTech was a really good opportunity for me to catch up with the Parisian and French Tech scene through meeting the startups and innovation centers. I spent a few more days in Paris before the event to feel the vibrant Tech ecosystem visiting NUMA, La Paillasse and Usine IO. At the moment they are quite representative of the Creative Technology scene in Paris, but the grand opening of Station F which is going to operate as a huge campus housing 1000 startups will for sure contribute a greater boost.