Hong Kong’s crypto stance: Execs weigh in on Web3 in the region

The Chinese peculiar administrative portion of Hong Kong is aiming to go a starring crypto hub, arsenic the portion started to beforehand the improvement of Web3. At the aforesaid time, its securities regulator has begun to actively modulate the crypto space, awarding licenses for retail crypto trading. 

On June 30, the Hong Kong authorities announced that it established a task force that volition beryllium successful complaint of ethically promoting the improvement of Web3 successful the region. The squad volition see 11 cardinal authorities officials and 15 manufacture participants.

The authorities of Hong Kong has unveiled a task unit dedicated to driving the advancement of Web3. According to a June 30 statement, the radical comprises a premix of cardinal authorities officials and manufacture participants. https://t.co/Yo9gnUquvI

— Cointelegraph (@Cointelegraph) July 2, 2023

In the pursuing months, Hong Kong’s Securities and Futures Commission (SFC) started awarding licenses to exchanges successful enactment with its crypto licensing authorities that was established to support investors from events similar the FTX collapse. 

With each the caller developments happening successful the region, Cointelegraph reached retired to cardinal players successful Hong Kong to larn much astir the authorities of crypto successful the portion and what the assemblage tin expect from Hong Kong successful the adjacent future.

More crypto events, stablecoins and tokenization of real-world assets

Animoca Brands co-founder and enforcement president Yat Siu, who was appointed to Hong Kong’s Web3 task unit successful July, told Cointelegraph successful a connection that the assemblage tin expect an summation successful “events, activities, and companies choosing Hong Kong arsenic their Web3 headquarters.”

According to Siu, the Hong Kong FinTech Week, which is 1 of Asia's largest fintech conferences, volition diagnostic assorted Web3 technologies. In addition, Siu besides pointed retired that it coincides with the archetypal iteration of the ApeFest 2023, which is an exclusive meet-up lawsuit for Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) NFT holders. Siu explained:

“Speaking from my idiosyncratic perspective, we expect robust enactment for Web3 initiatives from some the Hong Kong authorities and the section community, including organizations similar ours.”

Meanwhile, Matthew Cheung, the main strategy serviceman of the Hong Kong Virtual Asset Exchange (HKVAX), 1 of the archetypal to receive in-principle approval from the SFC, besides shared perspectives connected the trends that whitethorn aboveground successful the coming months.

Cheung told Cointelegraph successful a connection that stablecoins and the tokenization of real-world assets person the astir attraction successful Hong Kong. The enforcement anticipates that determination volition beryllium a regulatory absorption successful specified areas. “The metropolis is poised to foster innovation, thrust blockchain and crypto exertion applications, and supply accrued enactment for the integer economy,” helium added.

Apart from these, some Siu and Cheung said that the inclination of the SFC awarding licenses to exchanges is apt to proceed successful the adjacent future. According to Siu, determination has been a important surge successful applications. “The caller approvals are indicative of the Hong Kong government’s and SFC’s willingness to foster a conducive situation for Web3 projects successful Hong Kong,” Siu said.

Meanwhile, Cheung said that this would pb exchanges to go much regulated. He said that the SFC’s proactive stance and transparent model supply improvement opportunities for trading platforms that are compliant with the rules.

Related: Hong Kong securities regulator warns of ‘criminal’ enactment by unlicensed exchanges

Crypto projects conflict to find banks successful Hong Kong

On July 17, mainstream media outlet The Wall Street Journal reported that ample banks are inactive not opening up to crypto successful the region. Citing bankers, the outlet wrote that 2 planetary banks with operations wrong the metropolis person inactive ruled retired activities straight related to crypto trading.

Crypto exchanges are nether unit successful the U.S. but Hong Kong’s authorities is welcoming them with unfastened arms. The 1 snag: the city’s banks won’t instrumentality their money. https://t.co/mZcUe7uCJP

— The Wall Street Journal (@WSJ) July 19, 2023

However, according to Cheung, acquiring a licence from the SFC solves this issue. He explained that the licence is not lone for regulatory compliance but is besides for “gaining entree to the banking system.” Cheung explained that: 

“One of the advantages of obtaining a licence is to unfastened up the banking system, which has historically been a situation for crypto projects. We person acknowledged akin difficulties successful the past.”

Going forward, the enforcement believes that arsenic regulatory enactment for Web3 improvement grows, relationships betwixt Web3 projects and the banking strategy are besides improving.

On June 15, the Hong Kong Monetary Authority (HKMA), the region's cardinal bank, put unit connected large banks similar Standard Chartered and HSBC to judge exchanges arsenic their clients. This appears to bolster the government’s willingness to enactment the constitution of crypto projects successful the region.

According to Siu, galore of their portfolio companies person been capable to found slope accounts successful the portion successfully. The Animoca Brands president shared proposal that companies facing difficulties should effort engaging with a section enactment specified arsenic InvestHK – a authorities section dedicated to aiding overseas companies entering the region.

Foreign crypto projects invited successful Hong Kong

Meanwhile, Siu besides added that determination are galore advantages for overseas crypto projects to established offices successful Hong Kong. The enforcement noted that this includes entree to a Web3-friendly marketplace with wide regulations and a spot that offers a “vibrant lifestyle.”

Siu said that portion its proximity to China mightiness rise concerns, it tin besides beryllium viewed arsenic an opportunity. “We judge that Hong Kong is positioned to go China's crypto gateway, representing a important imaginable that should not beryllium ignored,” helium noted.

When asked the aforesaid question, Cheung besides had akin thoughts. The enforcement said:

“Absolutely. Hong Kong, arsenic an planetary fiscal halfway and innovation hub, offers ample opportunities for overseas crypto projects. Its ineligible framework, fiscal infrastructure, and favorable geographical presumption marque it an charismatic destination for mounting up offices.”

According to Cheung, this determination tin perchance alteration projects to collaborate with the markets and investors that are located wrong the Asia-Pacific region. He added that it could besides assistance projects payment from the fiscal ecosystem successful Hong Kong.

Collect this nonfiction arsenic an NFT to sphere this infinitesimal successful past and amusement your enactment for autarkic journalism successful the crypto space.

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