- 2019.12.03 [Tue]
Will SNS born in the international financial city of Hong Kong change the financial industry?
Hong Kong is an international financial city. In Hong Kong, any enterprises from any country can compete freely. People, goods and money continue to pour in from all over the world. On the other hand, strict review is done in finance businesses. Mature traditional finance is hindering the future growth of fintech services.
Hong Kong’s TideBit has developed a financial SNS “iSunOne” that uses blockchain to provide services that allow refugees and other people who cannot use banking financial services to trade with currency. Things that were not possible with traditional money have become possible on this platform, and the financial freedom that was once lost is brought back to people’s hands. This time, Mr. Abe of IFA interviewed Jun Ma, CTO of TideBit, to talk about the issues of traditional finance, the possibility of fintech, and the business strategies of companies from various countries in Hong Kong.
Only half of the world’s population have bank accounts
Jun Ma: I chose the path of entrepreneurship after graduating from college. By 2010,, I worked in development in the media industry. I was developing an app for an electronic gourmet magazine in Hong Kong. Since around 2015, blockchain and virtual currency have boomed, so I left my job and got into blockchain. Now, I operate the largest exchange for virtual currency purchase in Hong Kong dollars.
Abe: With the concept of “Financial SNS”, you are also developing a finance x SNS project.
Jun Ma: I would like to create a huge platform like Facebook and provide a “fintech service that anyone can use” to users who cannot use existing financial services. Currently, half of the world’s population lack general banking services.
Abe: There are many people who can’t have their own accounts, such as people in conflict countries and refugees. It means only some people can use the banking services.
Jun Ma: “iSunOne” provides virtual currency based on the local currency, so anyone can enjoy financial services. If it can connect the world with SNS like Facebook, you can change Hong Kong dollar to virtual currency and change it to US dollar. Virtual currency will function as a world currency.
Abe: If I want to mortgage virtual currencies with smart contracts and exchange them for coins in local currencies around the world. What are the actual procedures?
Jun Ma: We want to make it available to anyone, so we do not use proprietary device. Instead, we deploy it through conventional devices such as ATMs. The flow works this way: after cash is deposited through ATM, it will be converted into virtual currency, and you can withdraw it in local currency in other countries.
Abe: It’s easier than traditional banking procedures.
Jun Ma: Yeah. Usually, IDs and documents are required when you need to go through banking procedures and open a bank account; but there is no such need if virtual currency is used. Hong Kong and Japanese users can do this for granted, but it is not easy for refugees and other people who do not have a global bank account.
Abe: Are there other benefits?
Jun Ma: With face recognition and fingerprint authentication functions on our platform, you can trade directly without a card or mobile phone. Currently, we transfer money via ATM, but in the future we plan enable money transfer between smartphones.
With speedy transactions, you can invest in Bitcoin and you can also use Bitcoin as a mortgage to get cash. You can get cash without selling bitcoins. Even if you deposit money in a bank now, the interest rate is about 1%, but if you invest in a fund with only virtual currency, the interest rate will be about 5%.
Abe: If this new service is available, the number of bank users may decrease. Will the banks oppose it? Or is it okay because there are different objectives?
Jun Ma: Our main target gropu is people who cannot create bank accounts, so we are not hostile to banks. People who do not have a bank account can only receive cash when they work and will always have to bear the risks of loss or theft. I would like to give people who can’t use banking services a trustworthy way to protect their assets and give them financial freedom.
The “free port” – Hong Kong is “unfree”
Jun Ma: Although we are based in Hong Kong, we have branches in the United States, Japan, Taiwan province, mainland China, Malaysia, Singapore and Turkey, providing services to people all over the world. However, there are many people who do not have bank accounts in areas of Southeast Asia and Africa, and it is these countries that I mainly want to expand to.
Abe: Please tell us about the features of Hong Kong.
Jun Ma: Hong Kong is a region where it’s quite difficult to create a bank account. Although it is called the “free port”, it has to obey Chinese laws, American laws, and European laws. Blacklist in any one of these countries will disqualify you from opening an account. Because Hong Kong is a global financial hub, we conduct reviews based on very strict standards. Therefore, it’s hard to develop FinTech in Hong Kong.
Abe: It’s surprising that there are so many Japanese people with Hong Kong accounts.
Jun Ma: I’ve only talked about FinTech so far, and haven’t touched on traditional finance. They are quite different. In terms of finance, Hong Kong is a major global city like New York and London.
Abe: The Hong Kong Stock Exchange is one of the oldest stock exchanges in the world.
Jun Ma: Unfortunately, the development of traditional finance has made it difficult for innovative businesses to raise funds. Even if you don’t bother to challenge yourself, the financial industry can get money in Hong Kong. The Hong Kong Stock Exchange sets quite strict conditions for listing, so the world’s largest mining company cannot be listed here.
Abe: Japan also has a lot of traditional finance enterprises, and they can’t be get into the market without if they don’t follow the rules. It’s often found that innovative companies have difficulty entering the market. How can they be understood and get financed by the traditional financial industry?
Jun Ma: If you are going to be listed, you should draw cash flow that is easy for people to understand and submit it to the staff of the stock exchange. For example, a real estate company can get listed easily because its cash flow is easy to understand. We are planning to release mining farms in the future, but the business model for releasing mining places to people is close to real estate, so it will be easy to understand and receive loans.
Abe: Funds are raised with an easy-to-understand cash flow business. It seems to be a business strategy in Hong Kong.
Jun Ma: We are a group company, and we have multiple branches. The easy-to-understand cash flow business is operated by TideBit, which is listed on the Hong Kong Stock Exchange. This will help smooth out process of raising funds and turning the funds into innovative initiatives.
Abe: I see, you have quite a comprehensive plan.
Jun Ma: In some ways, finance is being deprived of freedom as it develops. Information and money are concentrated in the banks, and the freedom of users is deprived. With FinTech services operated by smart contracts, there will be no incidents such as fleeing or fraud, and everyone will be able to trade with confidence. I want to change the society with the new concept of “Financial SNS”.
Abe: I’m looking forward to it. Could you give a message to those who want to join the blockchain industry in the future?
Jun Ma: Even if the government prints a lot of money, rich people are getting richer and poor people are getting poorer, but the economy is not getting better. Blockchain has the power to change that social structure. If you want to change the society, please join us.
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Writer / Kaori Sugawara Editor / YOSCA Photographer / Ryo Kuramochi