CEO Viewpoint: Asia is leading the way in building the new global digital economy

December 3, 2019
Tomer Sofinzon

Tomer Sofinzon, CEO and Founder of 2030 Group, discusses HSBC's $20bn blockchain move and why he thinks Asia is leading the way in building the new global digital economy.

By Tomer Sofinzon, CEO and Founder, 2030 Group

I read with great interest the news that global bank HSBC has made the bold decision to take a leap of faith and transfer $20 billion of assets to a new blockchain-based custody platform by March 2020. Known as Digital Vault, it will reportedly give investors real-time access to records of securities bought on private markets. 

This is incredibly pleasing news and, in my opinion, marks a tipping point in the financial services industry. Blockchain enthusiasts have long been making the case for the transformative potential of decentralised technologies. Not just in revolutionising business processes. But in transforming the global economy in its entirety as the world moves from paper to digital.

Scepticism remains rife with many observers suggesting the potential for blockchain has been over-hyped. Blockchain has also been somewhat cursed and tarnished by the bad reputation of cryptocurrencies. To many, the word ‘crypto’ equals the ‘Wild West’ – an unregulated and a dangerous volatile landscape for the uninitiated. Perhaps this is fair, but it is also unfair, depending on your perspective and technical understanding of blockchain and digital assets.

For me, HSBC’s decision is a tipping point because it is a sign that digital asset banking is on the brink of becoming mainstream. Whilst there have been some adventurous and smaller banks and infrastructure providers experimenting with blockchain technology and digital currencies, none have come close to making such a large intention as HSBC’s $20 billion move. 

Seeing HSBC take the lead out of all the global banks is not that surprising to me. Yes, HSBC have their global headquarters in London, but for all sense and purposes they are an Asian bank and it is in Asia I am seeing the greatest open-mindedness and desire to lead the way in exploring how blockchain can transform industries. Especially in countries like China, Japan and South Korea.

It is China where I believe we will see the largest acceleration in blockchain innovation over the next three years. I was greatly encouraged by President Xi Jinping’s latest endorsement in October where he was quoted in China’s news agency, Xinhua, as saying blockchain would serve “an important role in the next round of technological innovation and industrial transformation.”

His words are already having an impact. Over 500 blockchain projects have reportedly registered with China’s Cyberspace Administration since last year with the People’s Bank of China (PBOC), China’s central bank, also stepping up efforts to launch a Digital Currency Electronic Payment System (DCEP). If this happens, it would make China the first major economy to adopt a domestic digital currency and a pioneer of the new global digital economy.

I have long been an advocate for China and regularly speak to entrepreneurs and investors who focus on investing in experimental technologies. Every conversation I have enhances my belief that China is leading the world in blockchain innovation. The industry is already established, thriving and well-diversified here, with technologists exploring game-changing ideas from financial services through to manufacturing, supply chain management and pharmaceuticals, to name a few. The early-stage ideas I have seen have the potential to be extraordinary. It’s all very exciting, to put it mildly.

I see China as being a strategically important market for 20|30 Group. We are building the decentralised technologies which will accelerate China’s vision to become a world leader in the newly emerging digital economy. Today, we are focused on transforming financial services and offer a range of digital asset blockchain-based products and services which no global financial institution can offer as a package, as of today, from custody and tokenisation, through to digital identity and data protection. We are also exploring how we can transform manufacturing and retail, specifically around the supply chain management process, as well as other sectors and industries too.

As we approach the end of the year, we start to think about not just what 2020, but the next decade will bring. Or as we say at 20|30 Group, what will the world look like by the year 2030?  Only time will tell but one thing is already clear in my mind, decentralised technologies will be mainstream by 2030 with Asia on the front line shaping the world’s technological future.