From left: The moderator and Founding & Managing Partner of Sequoia China Neil Shen, President of BlackRock Rob Kapito, President and Chief Operating Officer of JPMorgan Chase Daniel Pinto, Group Chief Executive of HSBC Noel Quinn, and Group Chief Executive of Standard Chartered Bill Winters, exchange ideas at the panel discussion “Technology, Innovation and the Future of Finance”. (ANDY CHONG / FOR CHINA DAILY)

Leaders of global financial behemoths on Wednesday voiced the significance of blockchain use in the banking sector, a development that could overhaul traditional payment systems amid the rising investment in digitalization.

The discussion came as Hong Kong embarks on a path toward crypto-asset regulation as part of its effort to be a top Asian fintech hub. The city announced a policy statement on Monday on the development of virtual assets, setting out a vision for the digital assets’ ecosystem.

Noel Quinn, group chief executive of HSBC, said the blockchain-based cryptocurrencies enable real-time international transactions with low costs, which will facilitate international trade and have a positive impact on small and medium-sized enterprises.

READ MORE: Odyssey through hardship

The businesses “can get the benefits of real-time cross-border movement of money that the large corporates get today,” he said. This will mean the time needed to acquire loans and financing for SMEs is expected to be greatly reduced, Quinn said.

Daniel Pinto, president and chief operating officer of JPMorgan Chase, talked about blockchain use in the company’s blockchain products and services — Quorum as well as JPM coin. The former is a data exchange platform created by JPMorgan for the validation of payment with a network of 400 banks, while the latter enables enterprises to optimize their payment flow with their bank accounts around the world.

The challenge to operating a public blockchain is opening the environment in a secure way, Pinto said, “I think that this is the time when this type of technology (blockchain), these types of use cases, are going to really accelerate substantially.”

BlackRock President Rob Kapito said he saw the customers’ surging appetite for investing in blockchain-powered digital assets, which will impact BlackRock’s portfolio management and its operation in the market ecosystem.

Kapito said BlackRock is working with Circle, the issuer of US stablecoin USD Coin, to explore opportunities for frictionless real-time settlement with the capital markets. This “will change the ecosystem, the efficiency and the cost to our clients, … so there will be more to come on this,” he said.

Cutting-edge technology plays an increasingly important role in banking digitalization.

Quinn said HSBC moved around $660 trillion last year around the world. “About 98 percent of the amount was straight through digital execution,” he said. PayMe, a mobile wallet operated by HSBC in Hong Kong, now has 2.9 million customers, and its merchant base is growing rapidly, he said.

Bill Winters, group chief executive of Standard Chartered, said that compared with general cryptocurrencies, central bank digital currencies can trace financial-crime cases with its surveillance functions, but “it runs counter to some objectives such as free flow of information and markets and transparency.”

“I think these are extremely indexing questions that will be tackled by some central maximum. We are in the early stage of (developing CBDC). … If we get a better customer experience, and less friction costs very much to those points, this can be a successful venture,” he added.

ALSO READ: Chan: HK's global financial hub potential boundless

The moguls in the banking and investment sector gathered at Four Season Hotel Hong Kong to share their opinions during a panel discussion on “Technology, Innovation and the Future of Finance” at the Global Financial Leaders’ Investment Summit.

The three-day summit, held by the Hong Kong Monetary Authority from Tuesday, aims to relaunch the city as a global finance center after years of rigorous travel curbs due to the pandemic.