The panel at the Hong Kong Liquidity Summit discussed three central problems hindering institutional participation in the digital asset economy, focusing on data sovereignty, custody, and the fragmentation of liquidity across platforms. Kim Jae-hoon of Mirae Asset explained that sensitive client information cannot be uploaded on-chain under data protection laws, so the firm employs a hybrid approach and keeps transaction data off-chain. Custody is structurally harder because traditional finance relies on custodians and central depositories, while digital assets require private key management and robust security to earn regulator trust. The session noted that traditional finance operates on custodians and central depositories, whereas digital assets require private key management and strong security to gain regulatory trust.
Next come trading platform issues, with hundreds of platforms existing—some using stablecoins, some fiat currencies, and others operating solely on-chain like hyperliquidity venues. “Balancing is very difficult,” Kim said. Kyobo Life’s Shin Byung-kook added that the institution’s inertia is a challenge and that their hybrid model pilots outside existing systems before persuading internal decision-makers and regulators. The bank’s solution is to pilot externally, validate results, then use those results to persuade internal stakeholders and regulators.
The article also discusses the strengths of traditional brokers in the context of Futu Holdings, one of Asia’s largest fintech platforms. Futu’s senior executive noted that their entry into crypto is not about catching up but leveraging trust, licenses, brand credibility, and established banking relationships. Hong Kong, Singapore, and the United States have crypto spot trading, and last year, Hong Kong enabled crypto deposits and withdrawals. Customers can withdraw crypto from the platform and immediately use those funds to purchase traditional securities.
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