Hong Kong’s Financial Secretary advocates for Web3 push despite market fluctuations

In the Brief:

  • Hong Kong's Financial Secretary wants to push forward with Web3 development during market change with focus on financial security, investor education, and anti-money laundering measures despite challenges in the crypto industry.
  • Hong Kong plans to promote blockchain technology to improve the economy while adopting a less hardline approach compared to the US.
  • Cryptocurrency exchange plans to launch in Hong Kong with global interest from crypto firms.
  • The US, on the other hand, is cracking down on crypto-related crime.

3 - 4 minute read

The Financial Secretary of Hong Kong, Paul Chan, believes that it is the apt time for the city to move forward with Web3 development despite the fluctuations occurring in the crypto market. Chan recently revealed that one of the major proposals he has made in Hong Kong’s budget is the development and application of Web3 to encourage innovation in the sector. The financial official affirmed that Hong Kong would implement a strategy that included proper regulation and promotion of development. Chan further stated the region’s focus on areas such as financial security and investor education, protection and measures around anti-money laundering.

In October 2022, the Hong Kong government floated the idea of introducing a bill to regulate crypto. By February 2023, the Securities and Futures Commission (SFC), the local securities regulator, released a proposal for a regime for cryptocurrency exchanges, which is set to take effect in June. Despite the crypto market facing challenges including exchange collapses and regulatory scrutiny, Chan compares the market’s current state to that of the early 2000s Internet, adding that after the “bursting of the bubble,” market participants became more focused on technological innovation, practical application and value creation, thereby improving the quality of the real economy.

Paul Chan delivered the opening remarks for a financial conference in Hong Kong through Zoom, as reported on Twitter.

To make the advantages of blockchain technology, including transparency, efficiency, security, disintermediation, de-platformization, and low cost, find wider application scenarios and solve existing problems, market participants need to develop it deeply in the next phase, according to Chan. Hong Kong’s approach to crypto regulation contrasts sharply with that of the US, which has adopted a more hardline response that has led to speculation that the crypto industry’s “center of gravity” will shift to Hong Kong.

Cryptocurrency exchange has already revealed plans to launch a presence in Hong Kong following the local government’s allocation of HK$50 million ($6.4 million) into Web3 in the city’s 2023-24 budget. The Secretary for Financial Services and the Treasury, Christian Hui, also noted that Hong Kong had been attracting interest from various crypto firms across the globe since October 2022.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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