Hong Kong’s Crypto Ambitions Remain Undeterred Despite Industry Downturn 12

Hong Kong’s Crypto Ambitions Remain Undeterred Despite Industry Downturn

  • Hong Kong remains undeterred in its ambition to establish itself as a crypto hub, despite the prolonged bear market. 
  • The local government is inviting technology and crypto startups to set up their international headquarters in the island city.
  • The regulatory agencies are currently involved with multiple pilot projects, including tokenized green bonds for institutional investors. 
  • Hong Kong recently set up a licensing system for virtual asset service providers. 

The ongoing crypto winter seems to have had little impact on the Hong Kong government’s ambitions to establish the region as a crypto hub. Unlike neighboring countries including Singapore, which have moved to limit their exposure to the volatile crypto industry, Hong Kong has ramped up its efforts to attract talent and enterprises from this space. 

Hong Kong to issue tokenized green bonds

While speaking at Cyberport, a state-sponsored tech incubator, Financial Secretary Paul Chan revealed that the local regulatory agencies and the government are currently involved in several pilot projects in the crypto space. This includes tokenized green bonds that will be issued by the government for subscription by institutional investors. 

“Hong Kong is at the golden starting point for financial developments in respect of Web3 and virtual assets. Our thinking is to put in place appropriate and proportionate supervision to unleash the potential of Web3..” Secretary Chan stated. 

The secretary also revealed that the government is in active communication with multiple companies and start-ups in the crypto space. These companies have been invited to set up their international headquarters in Hong Kong. The listing of the companies on the local stock exchange is also on the table. 

Joseph Chan, the Under Secretary for Financial Services and the Treasury highlighted the need to develop the required technology for virtual currency, virtual asset exchange, metaverse exploration, and innovative applications in which securities issuance and trade finance can be conducted through tokenization.

Just last month, the government of Hong Kong concluded the legislative process of setting up a licensing system for virtual asset service providers. Under this system, proper safeguards have been put into place to prevent money laundering and terror financing activities, while enhancing consumer protection.