Hong Kong Aspires To Become A Crypto Powerhouse Despite An Industry Crisis In 2022

Key Points:

• According to Paul Chan, Hong Kong’s financial secretary, the local government and regulators are willing to collaborate with crypto and fintech companies in 2023.
• In December, Hong Kong lawmakers passed legislation to create a licensing system for virtual asset service providers.
• The new regulatory framework aims to provide bitcoin exchanges with the same market recognition that established financial institutions already have.

Hong Kong is doing its utmost to offer enough supervision to the crypto market in order to unlock the potential of technologies like Web3.

Despite the current business crisis caused by the FTX crash, the Hong Kong government remains dedicated to the development of cryptocurrency infrastructure.

According to Paul Chan, the financial secretary, the local government and regulators are open to working with crypto and fintech businesses in 2023. On Radio Television Hong Kong (RTHK), Chan remarked at an event held by the state-run incubator Cyberport that Hong Kong has become a foundation connecting high-quality virtual asset enterprises.

Over the last two months, the country government has received numerous proposals from crypto-related enterprises to establish global headquarters in Hong Kong, according to the financial secretary. Many industry firms have also expressed interest in expanding operations in Hong Kong or going public on local exchanges, according to Chan.

He added that the lawmakers passed laws in December to establish a licensing framework for virtual asset service providers. The new legal framework is intended to give bitcoin exchanges with the same level of market acceptance as traditional financial institutions already enjoy.

Chen allegedly stated at the event that Hong Kong officials and regulators are implementing a variety of pilot projects to investigate the potential benefits of virtual assets and explore related applications. He mentioned that one of the projects is the government’s issue of tokenized green bonds for subscription by institutional investors.

Over the last year, Hong Kong has increasingly reaffirmed its pro-crypto attitude, with the goal of being the most crypto-ready country by 2022. This nation launched its first two exchange-traded funds (ETFs) for bitcoin futures in mid-December, raising more than $70 million ahead of their debut. The incident occurred shortly after the head of Securities and Futures Commission stated in October that the country is willing to differentiate its crypto regulating approach from the Chinese crypto ban that would be implemented in 2021.

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