The Hong Kong Convention Center recently hosted the city’s inaugural web3 festival, attracting thousands of people from mainland China, Singapore, Japan, Indonesia, Thailand, and the U.S. The event was held in the wake of the city’s proposed regulations to regulate crypto-related activities, allowing retail investors to trade certain digital assets on licensed exchanges. Additionally, the city is paving the way to legalize stablecoins, with one startup launching an offshore Chinese yuan (CNH)-pegged stablecoin, the first of its kind in Greater China. The web3 festival was a testament to Hong Kong’s commitment to becoming a hub for crypto ventures, with the city’s regulations providing a welcoming environment for digital asset trading.
Hong Kong’s Open Attitude
Hong Kong is creating a favorable environment for web3 businesses by facilitating communication between banks and crypto startups. This is in stark contrast to Beijing’s heavy-handed crackdown on the crypto industry and highlights the degree to which the former British colony enjoys policy exceptions in certain areas. As a result, many Chinese crypto entrepreneurs in self-exile are considering setting up in the city, while companies from the West are also evaluating Hong Kong as a potential outpost for their Asia expansion. Hong Kong’s open attitude towards digital assets is providing a safe haven for web3 businesses, allowing them to continue to operate and grow in a secure and supportive environment.
Hong Kong is emerging as a potential crypto hub, with the new regulatory regime providing a boost to the crypto industry. Participants at the Hong Kong Web3 Festival discussed the city’s attractiveness as a crypto hub, with some feeling reassured that they can now operate as a legitimate businesses in the city. Others are more hesitant, citing the lack of a vibrant tech ecosystem and expensive office space as potential drawbacks. However, the city’s status as Asia’s financial center could attract crypto businesses that serve and interface with traditional finance.
Rise of the East
Hong Kong is taking a friendly stance towards crypto, with the tightening of regulation in the U.S. after the FTX implosion providing a great opportunity for the city to step up. Hong Kong has always been at the intersection of the East and West and played an important role as the bridge to enter China, which was already proven before when exchanges like FTX and Bitmex set up shops there. Shixing Mao, co-founder, and CEO at Cobo, a Singapore-headquartered digital asset custody solution, believes the timing is favorable for Hong Kong’s move on crypto and that the city can take advantage of its position as a bridge between East and West. Lily King, chief operating officer at Cobo, also believes Hong Kong can leverage its position to become a leader in the crypto industry.
As the US takes a hostile stance towards web3 companies, Hong Kong is becoming an attractive destination for crypto businesses. Stephen Cheung, president of the decentralized social network Bi.social, believes that the city is more likely to attract Asia-based companies than Western ones. This is evidenced by the influx of crypto businesses from Singapore, which had previously come from China after the country’s crackdown on crypto. Luke Huang, director of business development at Safeheron, believes that Hong Kong is trying to build the basic infrastructure of the crypto industry, making it an attractive option for those looking to invest in the space.
Source of Confidence
The Hong Kong government has recently provided more regulatory clarity on the crypto industry, which has been met with praise from the public. HashKey Capital, one of the world’s largest web3 venture capital firms, has been operating in Hong Kong since 2017 and sees the move as an update of the licensing regime. Conflux, a Layer 1 blockchain, was also put at ease after meeting various Hong Kong government delegates during the web3 festival. The move has been seen as a reflection of the city’s policy consistency, providing a more secure environment for the crypto industry to operate in.
The city is showing strong support for web3 development, with its legislators, InvestHK, financial secretary, and monetary authority all backing the crypto industry. This new regulation is favorable towards transaction-focused crypto services, but there is also room for infrastructure builders. China’s Big Tech companies, such as Alibaba and Tencent, are also riding the crypto wave, with their cloud computing units looking to become the go-to cloud provider for the decentralized world. With the industry continuing to attract capital and talent from traditional industries, these tech giants don’t want to miss out.
Hong Kong: Established Economy and Cryto-Friendly City
The Web3 Festival in Hong Kong is a celebration of the city’s new crypto regime, but not all attendees are hot-headed. Investors from venture capital firms, web3 founders, fund managers, stock traders, and other traditional finance professionals are all in attendance to catch up with partners and investors and to assess the city’s level of crypto-friendliness. Rachel Lin, CEO and co-founder of SynFutures, observed that those in traditional finance are the most passionate about Hong Kong’s new crypto regulation. The event is a great opportunity for those in the crypto space to network and learn more about the city’s crypto regulations.
The city has seen an exodus of multinational corporations and local talent due to recent political events and is now looking to the crypto industry to bring in new talent and investment. The government has given a positive signal to the industry, and investors are looking for alternative assets in a slowing financial market. Hong Kong’s strength in the finance sector makes it well-suited to focus on digital assets, and the city is hoping to bring in new blood and talent to help revitalize its economy.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.