Hong Kong, one of the world’s major financial centers, has long been committed to cryptocurrencies and blockchain technology, but it faces competitive challenges from the crypto-friendly United Arab Emirates.
Panelists Chen Yuanzu, deputy secretary of Hong Kong’s Financial Services and the Treasury Bureau, and Johnny Ng, founder of web3 investment company Goldford Group, also acknowledged this fact when speaking at Consensus Hong Kong.
“The UAE is really aggressive,” said Ng, who has been a member of the National Committee of the Chinese People’s Political Consultative Conference since 2018.
He said places like Dubai and Abu Dhabi have established solid regulatory frameworks for virtual assets, with each region also placing them under a single, dedicated regulator. Ng added that South Korea, which has millions of crypto users and investors, also has a dedicated government agency responsible for crypto issues.
“I think the Hong Kong Legislative Council can recommend that the government do more, especially create a position to oversee all these things,” Wu said. “As an MP, I will actually help the government connect with MPs from other countries, such as South Korea.”
One of Hong Kong’s enduring attractions is that regulators have shown a consistent commitment to digital assets, which is “not surprising,” said Chan of Hong Kong’s finance ministry.
“Our regulation is transparent, certain and predictable, and we have always insisted on that,” Chen said. “That’s compared to some other jurisdictions, without naming names. Hong Kong is supportive of the growth of the digital asset industry whether it’s in a crypto winter or not. If you look at other jurisdictions, as things change and the ups and downs, they may shift.”
Under the compulsory licensing regime for Hong Kong’s Virtual Asset Trading Platform (VATP), the framework came into effect two and a half years ago and has issued licenses to 11 licensees.
Regarding the stablecoin regulatory system launched in August last year, Chen said that the first batch of licenses is targeted for the first quarter of this year.
Chan added that a licensing regime for digital asset traders and custodians is the next step and is expected to be proposed by Hong Kong’s Financial Secretary later this year, noting that multiple consultations and bill readings must take place first.
“It sounds like a long process, but it’s very important,” Chen said. “Because it means everyone in the industry knows what’s going to happen and there’s enough time to raise concerns, so there are no surprises and everyone knows what’s going to happen next.”