- Hong Kong has made significant regulatory changes to welcome firms operating with “Virtual Assets.”
- It has been revealed that around 80 crypto firms are now exploring moving to the region to take advantage of the friendly environment.
- Hong Kong is focusing on rules for Stablecoins and ETFs. It is also looking to collaborate with Mainland China.
Hong Kong has set out to become a crypto-friendly landing spot for companies in the Web3, blockchain, and crypto space. The Special Administrative Region is bringing forward clear, fair, and attractive legislation to crypto businesses.
As part of the pivot to attract crypto business to the region, the Secretary for Financial Services and the Treasury, Christian Hui, announced that Hong Kong has attracted interest from various crypto firms globally since October 2022.
Hui gave a speech on Monday, March 20, that specified over 80 “virtual asset-related companies” had shown interest in establishing their presence in Hong Kong.
This number includes 23 crypto firms from Canada, the EU, Singapore, the UK, and the U.S. that are eyeing headquartering their business in Hong Kong.
The interest shown by these firms, and the plans to establish themselves in a region that is more welcoming and less ambiguous in its legislation, is predicated on policy, regulatory requirements, visa requirements for talent joining the firms, as well as support measures for the sector, according to Hui.
A Region with a Mission
Key to Hong Kong’s attractiveness for crypto and blockchain companies is largely due to its recent policy changes. The region has been working on a licensing regime for “Virtual Assets” (VA) service providers, set to commence in June 2023.
Hui explained: “Through the establishment of a comprehensive and clear regulatory system, we are expecting more quality VA enterprises to set up businesses in Hong Kong or to seek development opportunities in Hong Kong.”
The Hong Kong regulators also focus on more niche aspects of the Virtual Asset space. As Hui pointed out, the Hong Kong Monetary Authority is working on a regulatory regime for Stablecoins, intending to implement these regulations in 2024.
Furthermore, Hui boasted that Hong Kong’s advanced securities rules would allow intermediaries to offer trading of crypto Futures ETFs to retail investors. He also discussed collaborating with Mainland China to use its CBDC–the digital Renminbi– to make cross-boundary payments in Hong Kong.
These steps make Hong Kong an attractive jurisdiction for crypto companies, especially given the difficulties many companies face in places like the U.S., where regulation is ambiguous and policing is hardline.
On the Flipside
- Firms in the U.S. claim regulators are too hard on policing the crypto space without clear legislation for them to follow, while the SEC maintains the rules are straightforward. This clash between firms and regulators makes the U.S. a hostile ground to operate from.
Why You Should Care
Suppose Hong Kong’s efforts to welcome crypto, blockchain, and Web3 companies propel the region to become a tech hub. In that case, other nations will likely follow but be behind the curve in capitalizing on Web3 innovation.
Read more about Hong Kong’s crypto legislation here:
Hong Kong Regulators Welcome Crypto Platforms with New Laws.
Read more about crypto getting blamed for the banking collapse in the U.S.:
“Unstable” Crypto to Blame for Banking Collapse? This Marijuana-Supporting U.S. Senator Thinks So