On 9 April, Paul Chan, the financial secretary of Hong Kong pushed Web3 despite the market volatility in the crypto industry. In a statement, he calls this the ‘right time’ to implement Web3-related services in the city.
According to the financial secretary of Hong Kong, the development of Web3 is deepening in the system, and the competition is very high for who will provide a well-regulated environment for this technology. He also believes that Web3 is going through a very crucial phase currently like the revolution of the internet after the 2000s. Hong Kong emphasizes a well-regulated, safe, and reliable atmosphere infrastructure that will facilitate clients as well as businesses.
After the collapses of three major crypto-friendly banks in the United States, the Silicon Valley bank, the Silvergate Bank, and the Signature Bank shocked the world and forced countries to launch strict measures against cryptocurrencies. However, Hong Kong has decided to take a different approach of both strict measures and leniency in Web3. Chan also informed that “we have provided $50 million to boost Web3 related infrastructure which will help in bringing more sophisticated technologies in the ecosystem”. Additionally, the fund will provide assistance to authorities to hold international seminars, promote cross-sector business cooperation and organize youth workshops. However, Chan accepted that this transition will not be easy because new things take time to adapt. The licensing registration will help them but the actual path will be gradual.
A few days back, Ambre Soubiran, the CEO of Kaiko said that the hardline approach of the United States towards cryptocurrency regulations will force companies to shift their focus towards Hong Kong. Some senators in the United States like Elizabeth Warren have been very reluctant towards cryptocurrencies and regularly voiced against the technology.
In October 2022, Hong Kong decided to take a different approach from mainland China and provide a favorable infrastructure for virtual assets frameworks. Hong Kong’s Securities and Futures (SFC) released a consultation paper and asked for public opinion on the proposed licensing regime set to come into effect in June. It suggests that all centralized cryptocurrency trading platforms present in Hong Kong have a license from the relevant regulatory body.
Hong Kong has been trying to become a global fintech hub for a very long time. On March 20, Christian Hui, Secretary for Financial Services and the Treasury revealed that over 80 virtual assets-related entities have expressed their interest in establishing their business. Around 23 companies have already started their businesses in the city. From providing additional funds to a well-regulated licensing registration system set to come into effect from 1 June, Hong Kong did well in Web3 and attracted various companies from various countries.