‘Right time’ for Hong Kong’s Web3 push despite market flux — Finance Secretary
Now is the “right time” for Hong Kong to push ahead with Web3 despite the volatility of the crypto market, according to Hong Kong Finance Minister Paul Chan.
In a blog post on April 9, Chan explained that one of the three main directions he has proposed in the city’s budget was for the further development and use of Web3.
Translated, Chan wrote that in order for “Web3 to constantly take the path of innovative development,” Hong Kong will “adopt a strategy that emphasizes both ‘proper regulation’ and ‘promotion of development.’
Chan says the region also plans to focus on financial security, prevent systemic risk and focus on investor education, protection and measures around money laundering.
Last October, the Hong Kong government floated the idea of introducing a bill to regulate crypto.
By February 20 this year, Hong Kong’s Securities and Futures Commission (SFC), the local securities regulator, released a proposal for a regime for cryptocurrency exchanges to come into force in June.
The industry has suffered from a violent bear market and setbacks with stock market collapses and ongoing scrutiny from regulators.
According to Chan, the industry is simply going through the same process as the Internet in the early 2000s, and after the “bubble burst”, market players became much calmer.
“After the wave of speculation subsides, the remaining powerful players will focus more on competing in technological innovation, practical application and value creation, helping to improve the quality of the real economy,” Chan wrote.
“In the next step, market participants need to develop blockchain technology more deeply, so that its characteristics and advantages of transparency, efficiency, security, disintermediation, de-platforming and low cost can find wider application scenarios and solve more existing problems.”
Hong Kong’s approach to crypto regulation stands in stark contrast to that of the US, which has adopted a more hard-line response that has led to speculation that the crypto industry’s “center of gravity” will shift to Hong Kong.
Related: Hong Kong crypto firms see interest from Chinese banks: Report
Cryptocurrency exchange Gate.io has already announced plans to launch a presence in Hong Kong following the local government’s planned 50 million Hong Kong dollar ($6.4 million) cash injection for Web3 in the city’s 2023-24 budget.
Speaking in Hong Kong on March 20, Financial Services and Treasury Secretary Christian Hui stated that Hong Kong has attracted “interest” from various crypto firms around the world since October 2022.
“The road to innovation and technological change has never been smooth sailing,” Chan said in his latest post.
“Although the direction of development is locked, the actual path must be worked out step by step; only by continuing to try can we find new solutions and new ways out,” he added.
Blade: US law enforcement agencies are turning up the heat on crypto-related crime
