Hong Kong is trying to project itself as the global financial hub in digital asset management. In February 2023, the government’s Financial Services and Treasury Bureau published a consultation paper outlining new guidelines for the virtual assets exchanges operating in the city.
Recently, Lucy Guzmararian, the advisory group member of Hong Kong’s securities regulator, released an important statement on current crypto regulation. During the WOW summit in Hong Kong, he said that its crypto rules might present short-term difficulties to crypto startups to provide a secure environment for stakeholders.
In January 2023, the announcement of the WOW Hong Kong summit was made public. After concluding successful editions in Lisbon, Dubai, and UAE, the WOW Hong Kong summit was held on 29-30 March. At the summit around 5000 people from different domains participated to discuss Web3-related topics. WOW Hong Kong was organized with the help of government agencies, Invest Hong Kong, and Hong Kong tourism.
According to Lucy Guzmararian, the benchmarks for the Virtual Assets Service Providers are fixed at very high standards. He also said that this step will help in matching the same compliance with traditional financial entities. For those who are not aware, in December 2022, Hong Kong’s legislative council passed a law that will establish a new licensing regime for virtual asset service providers, set to come into effect from June 1, 2023. Additionally, it will provide the same legislation as followed by traditional financial institutions.
After the collapse of the FTX crypto exchange, countries worldwide have faced pressure from the public to protect retail investors. Hong Kong’s decision to raise the standard of the benchmarks for the crypto startups could be seen as a side effect of FTX collapse.
In March, Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui informed that over 80 companies have shown their interest in establishing a Web3 company in Hong Kong. According to reports, around 23 companies have already started establishing their presence in the country ahead of the new regulations set to come into effect from June 2023.
Hong Kong is trying to become an international hub in digital assets through decentralized blockchains. Also, Hong Kong has included HK$50 million (US$6.4 million) in its annual budget for funding to support the expansion of the Web3 ecosystem.