Hong Kong Fintech Week 2024: AI and Asset Tokenization Illuminate New Pathways

Hong Kong Fintech Week 2024: AI and Asset Tokenization Illuminate New PathwaysFrom October 28th to November 1st, Hong Kong Fintech Week 2024 was held under the theme "Illuminating New Pathways in Fintech," attracting widespread attention from government and industry. Artificial intelligence (AI) and asset tokenization emerged as hot topics at the event, sparking lively discussions

Hong Kong Fintech Week 2024: AI and Asset Tokenization Illuminate New Pathways

From October 28th to November 1st, Hong Kong Fintech Week 2024 was held under the theme "Illuminating New Pathways in Fintech," attracting widespread attention from government and industry. Artificial intelligence (AI) and asset tokenization emerged as hot topics at the event, sparking lively discussions.

High-Quality Data and Specialized Tools Become Key to AI Development

On October 28th, the Hong Kong Special Administrative Region (SAR) government released a policy declaration on the responsible application of AI in financial markets, alongside a series of supporting measures aimed at fostering the healthy development of Hong Kong's fintech industry. The declaration emphasizes Hong Kong's open and prudent approach to AI applications in financial markets as an international financial center.

Paul Chan, Financial Secretary of the Hong Kong SAR, highlighted: "As AI technology continues to evolve, we will closely monitor market developments, learn from experiences both domestically and internationally, leverage Hong Kong's unique advantages in data aggregation and free flow of information, and drive the application of AI in the financial services industry, fostering new and high-quality productivity."

In recent years, the rapid development of large language models (LLMs) has attracted global attention within the technology industry. ChatGPT's user base reached 100 million at an unprecedented pace, propelling the AI industry into the "ChatGPT moment." However, after a period of development, LLM performance began to plateau, shifting the focus to application areas. With its vast data accumulation, the financial industry has become a significant area for AI technology application.

Wang Wei, CTO of Ant Group, stated at Fintech Week that high-quality industry data and specialized tools are critical barriers and thresholds for the sustained development of AI. He emphasized that industry applications require systematic solutions to address issues of professional rigor and security and reliability. High-quality data enables better simulation of the objective world, enhancing model accuracy and stability.

Over the past decade, the AI development paradigm has shifted, leading to changes in data requirements. Machine learning has transitioned from a "model-centric" to a "data-centric" approach. In the current LLM era, achieving security and reliability in industry applications hinges on effectively combining specialized human expertise with AI algorithms to generate high-quality labeled data through efficient annotation.

As publicly available internet data gradually depletes, and the GPT-o1 model introduces a new paradigm for reinforcement learning training, the importance of data synthesis is becoming increasingly apparent. Wang Wei emphasized that the ability to synthesize more high-quality, high-value domain data not covered by the internet through simulation engines and self-play reinforcement learning will be key to achieving artificial general intelligence (AGI).

Hong Kong Promotes Asset Tokenization, RWA Gains Momentum

Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), announced a series of new measures at Fintech Week, signaling an intent to lead Hong Kong's fintech development by advancing asset tokenization, breaking down payment barriers, harnessing data potential, and enhancing bank digitalization capabilities.

Over the past year, Hong Kong has made notable progress in asset tokenization. In May 2024, the Ensemble project was officially launched as a significant financial innovation initiative in Hong Kong. On August 28th, the HKMA released details of the first phase of the Ensemble project, highlighting a typical example where Ant Group supported Langxin, a mainland Chinese listed renewable energy company, in securing a RMB 100 million cross-border RWA financing in Hong Kong. This marks the first RWA project for renewable energy in China.

RWA refers to a method where asset ownership is traded on a blockchain in a digital form (token). Compared to the challenges of asset ownership certification and trading for physical assets, RWA allows the division of physical assets into multiple "on-chain" digital assets, leveraging the interconnectivity of the global blockchain network to enhance asset liquidity and reduce transaction and financing costs.

At Fintech Week, Ant Chain publicly unveiled its "Two Chains and One Bridge" platform specifically designed for RWA businesses, aiming to facilitate the RWA of more mainland Chinese renewable energy assets in Hong Kong. Zhang Chengguang, Head of Web3 Business Products at Ant Group, explained that the platform comprises "asset chains," "transaction chains," and the "Ant Chain Trusted Cross-Chain Bridge."

The "asset chains" enable enterprises to digitize and standardize their physical assets, converting them into tradable financial products in mainland China. The "transaction chains" focus on tokenizing funds, particularly from traditional financial institutions, facilitating efficient fund circulation and transactions through blockchain technology.

During a group interview with the media at Fintech Week, Sun Lei, Vice President and General Manager of China Business Development at Ant Group, stated that product development and standardization of assets and funds are crucial for the successful implementation of RWA. Only through true product development can these assets find wider application scenarios in the market.

Furthermore, companies need to continuously invest in the underlying technology, ensuring security, stability, and improved processing speeds. As on-chain assets increase, failure to meet these requirements could impede development.

Sun Lei further pointed out that Fintech Week participants displayed strong interest in RWA. The future hinges on enrichment of the asset side and expansion of the funding side. While traditional financial institutions are currently heavily involved, many emerging financial institutions are also starting to explore RWA. As both sides continue to grow, this business is poised for accelerated development in the future.