The same goes with mBridge, the cross-border payment project that recently completed a number of pilots. For the platform to be sustainable, it is important for as many banks and their clients as possible to use it. The more the better. It is similarly important to include as many currencies and jurisdictions as possible. There is a virtuous cycle: the larger the network, the more the users, which in turn will further expand the network. So again, “more is more”. Beyond Tech 26. My third reflection is that the key to success is “beyond tech”. (Not “BioNTech” the vaccine!) Here I am referring to the need to go well beyond technology to create network effects. 27. Projects that fill a glaring gap in available services, as was the case with FPS for example, may achieve quick adoption more easily. But for other projects that seek to replace current products or practices, adoption could be an issue even if the new product or experience is far superior to what we have currently. 28. Let me illustrate this using our CDI initiative. The technology to construct this infrastructure and connect all parties is relatively simple. Creating a conducive environment to attract all stakeholders to join is far more challenging. 29. The project team spent most time not on technology, but in creating a commerciallyviable arrangement to ensure that there’s something for everyone: banks can use data to manage credit risks; data providers can earn fees; and data owners can borrow more easily and cheaply.
No one can say that they were sure how these innovations would shape things to come, and some of us, understandably, were just hoping they would go away so that we could get back to business as usual. Financial markets don’t really like surprises, and the idea that disruption is a good thing was a bit unfamiliar to many. 14. Over time, it has become apparent that these innovations, in particular the technologies and business innovation underpinning them, are here to stay and will naturally develop in a healthy financial system like Hong Kong’s. They have the potential to improve efficiencies, reduce intermediary cost and promote innovation. 15. Digital innovations encompass a wide spectrum of products and services beyond the commonly-known crypto-currencies. DeFi, given its composability feature, can inspire innovation in finance. Take tokenised green bonds as an example. We concept-tested the idea with the BIS Innovation Hub last year and are adopting it for an actual issuance  later this year. When both bond and cash are tokenised and brought on-chain, all bond lifecycle events like asset servicing, trading and redemption can happen more efficiently in a distributed manner. It could even make possible real-time tracking of the green impact. 16. In addition to traditional financial assets, the blockchain technology also allows fractionalisation of asset ownership in art, real estate or other assets, creating new forms of financial intermediation. With radical open-mindedness, we can use technological innovations to make financial markets more complete and bring benefits for the real world. 17.