Hong Kong has seen huge interest from companies related to virtual assets as the city tries to regain its position as a global crypto center with a more friendly regulatory stance.
Christian Hui, Minister for Financial Services and the Treasury of Hong Kong, said during a recent speech that more than 80 cryptocurrency-related companies have expressed interest in establishing a presence in the city from October 2022.
“As of the end of February 2023, Invest Hong Kong has received expressions of interest from more than 80 mainland and foreign virtual asset-related companies to establish a presence in Hong Kong.”
Hui detailed that these companies include virtual asset trading platforms, blockchain infrastructure companies, blockchain network security companies, virtual currency wallets and payment companies, as well as other projects operating in the Web3 space.
While most of these firms are from China, some other companies that have expressed interest in relocating to Hong Kong are from Canada, the EU (European Union), Singapore, the UK and the US.
Hui noted that these companies were interested in learning more about the “implementation details” of the policy statement, regulatory requirements, visa requirements for recruiting talent and targeted support measures for the virtual asset sector and Web3.
The surge in interest came after the Hong Kong government released its policy statement on the development of virtual assets in October 2022, clarifying its stance on virtual assets.
Hong Kong is well positioned to become a global crypto hub
Hong Kong, once the world’s crypto hub, began to lose ground in mid-2022 amid growing concern over the city’s ambiguous cryptocurrency regulation and the emergence of potential competitors such as Singapore and Dubai, which are seen as friendlier to the crypto industry.
However, the city has recently taken a more crypto-friendly stance in an effort to re-attract crypto companies.
In February, the Hong Kong Securities and Futures Commission (SFC) published consultation paper on the proposed regulatory regime for crypto trading platforms. The new rules will take effect from June and will require all crypto platforms to be licensed by the SFC.
The regulator also noted that retail investors will be allowed to trade certain “large-cap tokens” on licensed exchanges, given that safeguards such as background checks, risk profiles and reasonable risk limits are put in place.
Before that, the Hong Kong government allowed retail investors access to exchange-traded funds (ETFs) that invested in CME Group’s (CME) bitcoin and ether futures.
“Hong Kong is well positioned to become a leading Web3 hub in Asia and beyond, and we attach great importance to virtual assets (VA) and Web3,” Hui said during the speech. He also noted this year’s budget allocation of HK$50 million ($6.4 million) to develop the city’s Web3 sector.
“The government has a high-level commitment to developing the sector and providing a comprehensive support system for businesses that are passionate pioneers and start-ups in this industry, just like you all.”