Hong Kong will form a working group of policymakers, regulators and crypto industry players to set the agenda for its Web3 ambitions, a senior government minister has said.
As part of a budget plan which promised “abundant opportunities” for the city, Finance Secretary Paul Chan stressed the need for Hong Kong to seize the “golden opportunity” of Web3.
“For the next step, I will establish and lead a working group on VA [virtual assets] development, with members of relevant policy bureaus, financial regulators and market players, to provide recommendations on the sustainable and responsible development of the sector,” Chan said in a speech.
Hong Kong’s restrictive crypto-trading rules, introduced in 2018, had limited market participation to professional investors, banning everyday retail users.
But since late last year, the administration has suggests loosen those rules and regain Hong Kong’s status as a crypto hub.
These plans were confirmed earlier this week when the Hong Kong Securities and Futures Commission (SFC) published a new consultation document, proposing to allow all types of investors access to virtual asset trading platforms, subject to various conditions.
Some crypto firms have already indicated their confidence in Hong Kong’s change of heart. On Monday, the Huobi exchange announced that it was working to obtain a Hong Kong crypto license. The company said in a Tweeter he was “delighted” with the city’s pro-crypto policies.
Chan’s budget speech also allocated HK$50 million ($6.37 million) to support Hong Kong’s creative digital community’s Cyberport Web3 hub. The hub was inaugurated in January, and aims both to support local businesses and to encourage international companies to settle in the city.
China signals support?
There have also been signals that efforts to make Hong Kong a crypto hub may have under-the-radar support from Chinese leaders, with Bloomberg reports that representatives of the Chinese Liaison Office have participated in recent crypto events in the city.
While China itself maintains a crypto banHong Kong has traditionally acted as a conduit for global companies seeking access to the Chinese market.
Commenting when the policy changes were first reported, BitMex co-founder Arthur Hayes said this aspect will be crucial in determining the city’s attractiveness to global crypto businesses.
“If the Chinese capital is there, the Western capital will meet it. This is why Hong Kong’s financial markets are so powerful,” he wrote on his blog.
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