By
Chimamanda U. Martha
April 19th, 2024
Receiving the license from the Hong Kong SFC, Tencent will be working on a blockchain-based virtual banking system.
It’s a big win for Chinese tech giant Tencent as Hong Kong’s top-most regulator – Securities and Futures Commission (SFC) – has recently granted them a new license to open a virtual bank.
On Friday, November 8, speaking at the World Blockchain Summit in Wuzhen, China, Tencent’s chief of blockchain division – Yige Cai – said that his company has received a go-ahead from the SFC to open blockchain-based virtual banking system in the country.
Although not many details of the bank’s launch are available at the moment, Tencent has already started building its team for this project. Sina Finance, a Chinese financial media site quoted Cai saying:
“Hong Kong’s new regulations and supervision on digital assets transactions validate the importance of blockchain technology and digital assets, which is good news for the whole industry”.
Note that Tencent is not the only company to get a virtual bank license from the SFC. The Hong Kong regulator has so far granted a virtual banking license to 12 different entities. Among them also includes Infinium Limited which is a joint venture between Industrial and Commerce Bank of China (ICBC), Tencent, and two other institutional investors from Hong Kong.
Cai praised Tencent’s ability to execute such large projects by pointing out the company’s existing blockchain projects. Tencent is currently working with a fast-food chain McDonald’s for handling its supply chain financing on a blockchain network.
Tencent’s Blockchain and Crypto Ambitions
Like other tech companies in the market, Tencent is seeing a huge opportunity in the blockchain and the crypto space. The company’s WeChat Pay service is already popular in China giving Tencent an edge in the financial payments industry.
Recently, Tencent published a whitepaper citing global competition in the digital marketing space with companies like Facebook working on its cryptocurrency project Libra. Tencent sees a major threat to its payments business if Facebook succeeds in launching the Libra cryptocurrency next year.
Tencent says that Facebook’s Libra can easily make inroads in countries where local currency is weak, and going further, it can dominate the global payments market.
On the other hand, Hong Kong is also taking some bold measures to regulate its cryptocurrency industry. Earlier this week, the SFC also rolled-out a licensing scheme for local cryptocurrency exchanges which is currently applicable to security brokers operating in Hong Kong.
