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.
And to help us navigate this long, winding and foggy road, we should take a pause and look back, and ask ourselves what we did well, what we could have done better, and how to do things better in the future. 10. Today I would like to take this opportunity to share three reflections with you. I won’t pretend that these are in any way definitive. But these, I believe, are the key takeaways from our experience so far. Radical Open-Mindedness 11. The first reflection is the need for radical open-mindedness, a term that I borrow from Ray Dalio, who used it to describe idea generation in investments. I would say this is even more applicable to fintech innovation – we need to be radically open to new ideas and try things that could make the financial system better. 12. When we brainstorm ideas for new fintech projects, we usually won’t know where they will lead us. The only sure thing is that if you don’t try, you never get anywhere. The key is to learn from failure and move on. This mindset has gotten us the hugely popular FPS, eight virtual banks and a vastly more advanced data-sharing infrastructure in our financial system. 13. In the beginning we were sometimes a bit resistant, wondering how new creatures like crypto, stablecoins, DeFi and other blockchain-based innovations can fit into “mainstream finance”.