Hong Kong Securities Regulatory Commission: Hong Kong positions itself as a global leader in virtual assets

The Hong Kong Financial Services Development Council (hereinafter referred to as "FSDC") is vigorously promoting the development of Hong Kong's Web3.0 ecosystem.

In its recently released 2022/23 Annual Report (hereinafter referred to as the "Annual Report"), the Hong Kong Securities Regulatory Commission pointed out that Hong Kong has favorable conditions to play a leading role in the global development of Web 3.0. Hong Kong's regulatory environment is conducive to institutional investors' participation in the cryptocurrency industry. Hong Kong is positioning itself as a global leader in the development of virtual assets and complementary technologies.

1Positioning as a global leader in virtual assets

On July 27, the Financial Services Bureau released its 2022/23 annual report, which pointed out that Hong Kong is positioning itself as a global leader in the development of virtual assets and complementary technologies (such as blockchain and Web 3.0), and that Hong Kong's regulatory environment is conducive to institutional investors' participation in the cryptocurrency industry.

Last October, the Hong Kong government issued the "Policy Statement on the Development of Virtual Assets in Hong Kong", which clarified the policies and guidelines to be implemented for the development of the virtual asset industry and ecosystem in Hong Kong, and proposed that Hong Kong will maintain an open and compatible attitude towards innovative personnel engaged in virtual asset business around the world, and create a convenient environment to promote their sustainable development.

Currently, Hong Kong’s booming Web3.0 is attracting the attention of Web3.0 entrepreneurs around the world.

The annual report pointed out that Hong Kong is well-positioned to play a leading role in the development of the global Web 3.0. As an international financial center, Hong Kong has rich local expertise and a regulatory framework suitable for international investors. The government is working with local financial regulators to create a favorable environment for the sustainable and responsible development of the virtual asset industry, while establishing necessary safeguards in accordance with international standards to mitigate actual and potential risks.

Au King-lun, executive director of the FSCA, said in an interview that the bankruptcy of the cryptocurrency exchange FTX once made the industry panic. The Hong Kong SAR government's introduction of a regulatory framework can be said to be "long-term". "Regulation is very important for the long-term development of the market. It will provide the entire market with a clear and compliant framework for development."

Web3.0 is bringing development opportunities to Hong Kong.

The annual report stated that Web 3.0 is a new era of the Internet that combines cryptocurrencies, non-fungible tokens and the metaverse, providing professionals who are determined to provide solutions with opportunities to shape the future digital world. In addition, Web 3.0 also provides a series of new job opportunities for young professionals.

Hong Kong Legislative Council member Wu Jiezhuang told Techub News that Web3.0 is very broad. In addition to virtual assets, it also includes the metaverse, Gamefi, DeFi, AI, etc. Web3.0 is an emerging industry, and there are no giant companies that occupy a monopoly position. He hopes to develop the Web3.0 industry to create more opportunities for Hong Kong, especially for young people to have opportunities for upward mobility.

The annual report reviewed the work of the FSDC from April 2022 to March 2023. The annual report pointed out that the FSDC actively carried out market promotion and told the Hong Kong story through three overseas visits from September to November 2022, including participating in 21 roundtables/large-scale conferences and more than 80 meetings in 10 locations around the world to enhance global confidence in Hong Kong's financial services industry.

Web3.0 is an important part of the promotion work of the Financial Bureau.

In October 2022, the FSDC held a panel discussion on "The Future Vision of Hong Kong's Digital Assets and Blockchain Industry" at the Hong Kong Fintech Week. The discussion was chaired by Au King Lun, Executive Director of the FSDC. Participating guests included Animoca Brands President Ouyang Qijun, Concept Capital Partner Zhang Ruiqi, and Blockchain Technology Founder Wang Shisong.

In November 2022, Au King-lun participated in the Cryptocurrency Leaders Seminar in London, UK, to discuss "Trends and Opportunities in Virtual Assets and Blockchain in Hong Kong". Relevant persons in charge from Hongzao Technology, GFT Financial, Quinlan & Associates, etc. participated in the discussion.

2. Hong Kong can serve as a pilot for the development of virtual assets in the country

According to the official website of the Financial Services Development Council, the Financial Services Development Council was established by the Government of the Hong Kong Special Administrative Region in 2013. It is a high-level, cross-sector advisory body that aims to consult the industry and make recommendations on promoting the development of Hong Kong's financial services industry and the strategic development of the financial industry.

In September 2018, the FSDC was registered as a company limited by guarantee, enabling it to perform its functions more flexibly in areas such as research, marketing and talent development.

The annual report pointed out that the work objectives of the Financial Services Development Bureau include: providing strategic advice to the government on developing Hong Kong's financial market and enhancing Hong Kong's competitiveness as an international financial center, supporting the financial services industry to enhance the core competitiveness and knowledge of practitioners, and promoting Hong Kong's financial services industry and Hong Kong's advantages as an international financial center.

As early as the beginning of last year, the Hong Kong Securities Regulatory Commission suggested that Hong Kong vigorously promote the development of Web3.0.

In January 2022, FSDC Chairman Li Luren said in an exclusive interview with the media that the Hong Kong Special Administrative Region can serve as a pilot for the country to develop virtual assets. Virtual assets can bring opportunities for the development of financial technology in Hong Kong. Hong Kong can first work on anti-money laundering, securities laws and tax laws to catch up with the needs of developing virtual assets as much as possible.

In December last year, Li Luren said on a TV program that virtual assets have bubble risks, but it is an inevitable trend to involve technological development. Only by bringing virtual assets under supervision can the market develop in an orderly manner. Virtual assets are very risky. If they are not regulated or recognized, the risks will actually be greater.