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 Gate.io 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.
