In line with plans to become Asia’s leading crypto hub, Hong Kong authorities have unveiled plans to allocate HK$50 million (US$6.4 million) to develop the city’s Web3 sector.
“The third generation Internet (Web3), now in its infancy, has the same enormous potential. We must move with the times and seize this great opportunity to lead innovative development,” said Paul Chen, the city’s financial secretary, in his 2023-2024 budget speech.
Referring to the state-run Cyberport incubator, the official noted that earlier this year, the organization created a new blockchain-focused initiative, Web3 Hub@Cyberport.
“I will allocate US$50 million to accelerate the development of the Web3 ecosystem by, among other things, organizing major international workshops to enable industry and enterprises to better understand cutting-edge developments and promote cross-industry business cooperation, as well as organizing a wide range of youth workshops,” – noted the financial secretary.
“Over the past few months, a large number of innovative businesses with potential have been considering setting up business in Hong Kong. In the next phase, I will establish and lead a task force on VA development, which will include representatives from relevant policy bureaus, financial regulators and market participants, to provide guidance on the sustainable and responsible development of the sector,” said Chen.
Hong Kong authorities have demonstrated their determination to continue to develop access to blockchain technology and cryptocurrencies despite ongoing market turbulence. In November last year, Chan said that while the sudden collapse of major cryptocurrency exchange FTX has shaken cryptocurrency markets around the world, it will not hinder Hong Kong’s cryptocurrency-related plans.
“Our policy statement issued recently contributes to such an environment and gives the industry high hopes for the development of Hong Kong’s virtual asset market,” said the official, who has served as Hong Kong’s financial secretary since 2017.
That same month, the Securities and Futures Commission (SFC), the City’s top securities regulator, proposed to go ahead with plans to give retail investors access to exchange-traded funds (ETFs) that track cryptocurrency futures. In December 2022, two exchange-traded funds (ETFs) – Bitcoin Futures ETF CSOP Asset Management and Ether Futures ETF – debuted in Hong Kong as the first of their kind in the Chinese city.
At the same time, crypto investors are increasingly concerned about the Chinese territory’s regulatory ambiguity regarding digital assets and potentially negative changes in the law. As of last January, the city’s financial companies were preparing to allow their retail customers to trade digital assets in the coming months under the Anti-Money Laundering and Anti-Terrorism Financing Act passed by Hong Kong’s Legislative Council.
