- Hong Kong has released reports focusing on the impact of the metaverse and DeFi on its economy
- The reports outlined “monitorable financial activity” and “workplace social events” as some of the use cases of DeFi and the metaverse, respectively
- The report also looked into other things like regulations and the future of the two technologies
The Hong Kong Academy of Finance (AoF), through its research department, Hong Kong Institute for Monetary and Financial Research (HKIMR), has released two reports dedicated to exploring the impact of DeFi and the metaverse in the country. The reports outlined, among other things, the use cases of the two technologies, with hosting workplace events in the metaverse and fueling “monitorable financial activity” being among the top metaverse and DeFi uses. HKIMR also noted that regulators and policymakers “have a role to play,” an observation that echoes the ongoing involvement of regulators in the blockchain space across the globe.
Challenging to Regulate Smart Contracts
According to one of the reports, the metaverse is currently majorly used for talent recruitment, marketing and promotion but has the potential to revolutionize customer interactions and workplace social events.
The DeFi report, on the other hand, disclosed that DeFi allows for greater financial inclusion, complex business logic, decentralized decision-making and control. HKIMR observed that the DeFi technology can be used in, among other areas, derivatives and insurance.
The AoF, however, noted that smart contracts and blockchain’s decentralized nature present challenges in regulating DeFi and the metaverse. Other factors like lack of global coordination and financial stability add to the regulatory dilemma.
South Korea Training Metaverse Experts
AoF’s report comes at a time when countries like South Korea and Europe are increasing their involvement in the DeFi and metaverse world. South Korea, for example, is funding a local university to train metaverse experts, while Europe is considering developing DeFi-specific regulations.
With Hong Kong outlining the benefits and regulatory challenges facing DeFi and metaverse technologies in the country, it’s to be seen whether it’ll formulate DeFi and metaverse-friendly regulations to spur their adoption.
