The Hong Kong Securities and Futures Commission has come out in support for blockchain technology, saying that the technology has the potential to ensure proper implementation of Anti-Money Laundering and Know Your Customer (AML/KYC) regulations by the banking sector.
The views were put forward by Benedicte Nolens, the head of risk and strategy for the Hong Kong Securities and Futures Commission, at the MIT Technology Review Emtech Conference, South China Morning Post reported.
“I do think quite obviously KYC and AML stands out there as a pretty significant inefficiency and problem case. If you start tallying up the fines, that banks have been subjected to globally for this field, you’re into the 10 billion or more of US dollars,” said Nolens, adding that the technology could be implemented in those areas where there are clear problems to solve.
Nolens further noted that as it takes time to execute new ideas in a bank’s back office, blockchain could be implemented more readily where there are no existing processes.
“As you know, there is a much broader aspect to fintech to do with, for example, digital banking, crowd funding, the settlement of private securities,” she said, as quoted by SCMP. “Maybe adoption will start in those areas where there aren’t entrenched back offices.”
Earlier this year, the Hong Kong’s Steering Group on Financial Technology underscored how the technology could make the local financial services industry more economical and secure. In addition, the People’s Bank of China has also expressed its interest in the technology and revealed plans for launching its own digital currency.
