Future of Fintech in Macau
by Raymond Chan, published in Casino Life Magazine (Issue 135 Volumn 15)
This month is marking the 20th anniversary of Macau’s return to China and the China government has praised the city for upholding the “one country, two systems” framework that governs both Hong Kong and Macau. China also announces a raft of new policies aimed at diversifying the city’s casino-dependent economy into a financial center, including the establishment of a yuan-denominated stock exchange and the acceleration of a renminbi settlement center already in the works. The signal is very clear: Macau future focus will be on finance, and let’s take this chance to review the fintech development in the city and the neighboring mainland China.
When we talk about fintech, blockchain for sure is the hottest topic in the recent days. Blockchain is a distributed database technology where every participant shares and synchronises information. Back in October at a group study session for members of the senior government officials, Chinese President Xi Jinping called for more research and investment into blockchain technology. The news have created a lot of excitement in the financial world. Some NASDAQ-listed China blockchain development companies shares up from 16% to 108% and Bitcoin also rose sharply. However, the fever soon died down and most stock prices falling below their previous levels.
Xi’s push for the technology did not come as much of a surprise actually. The world’s two major financial transaction providers SWIFT and the Clearing House Interbank Payments System (CHIPS) are American global hegemony. It is reasonable to believe that there is a certain risk associated with a high degree of reliance on them for other countries. Building a new blockchain network can be a solution to solve that risk. Technically, blockchain can facilitate cross-border payments and it might also have an impact on promoting China renminbi internationalisation in overseas markets as well. As the ongoing Sino-US trade war, it make sense for Beijing to rethink the dependency on the current international monetary framework.
China actually has a technology gap in blockchain with the US as more than 90 per cent of domestic Chinese blockchain systems are based on foreign codes or their variants, according to a 2018 report by the China Academy of Information and Communications Technology. However, the Chinese companies are very forward-thinking in the use of blockchain technologies. China’s tech giants Baidu did blockchain-based financing back in 2016, while Tencent supplied the Shenzhen invoice system. Alibaba has also used blockchain in some of their business operations. Facebook chief executive Mark Zuckerberg has once warned US Congress about China would overtake the US in innovation. He said: “We cannot sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate.”
In my opinion, blockchain is a perfect use case as a regulatory technology because it will be able to know the entire transaction process without the need to approach each commercial bank for verification. This can also apply to gaming industry as it is also a highly regulated businesses worldwide and it is important to make the data transparent to those who needs that most, i.e. regulators and operators. But it does not mean that blockchain is the only solution for all problems. It is costly to implement and can be replaced by other technologies in most industry applications. We are still in the early stage to apply blockchain in Gaming. We can just stay tune to see how this new Fintech will be used in the future.
About Raymond Chan
Raymond Chan is a 20-year data science and business innovations veteran. He is the founder of Alphamirai, a research and investment company focusing on developing extraordinary new products through emerging technologies and venture capital.
Original Article:
https://issuu.com/peterwhite3/docs/casino_life_issue_135__2019_high_res/45
