Hong Kong’s Financial Secretary Doubles Down on Crypto Hub Positioning Despite Crypto Winter

Paul Chan, Hong Kong‘s Financial Secretary, said that, despite the ongoing market downturn, the city would continue to work toward becoming a major crypto hub, attracting businesses from across the world.

Chan, the Financial Secretary since 2017,  was speaking at a Web3 forum, Bloomberg reported, when he said that Hong Kong would become the place for startups of all kinds – including crypto and fintech – to set up shop in 2023.

He reiterated that the city plans on becoming a regional crypto hub – despite the fall in crypto prices and the ever-spreading contagion prompted by a number of major companies falling, not the least of which is the FTX exchange.   

The Financial Secretary stated that,

“As certain crypto exchanges collapsed one after another, Hong Kong became a quality standing point for digital asset corporates.” 

Per Chan, while other crypto centers – such as Singapore – are pulling the breaks on their crypto plans, Hong Kong has a robust regulatory framework that “matches international norms and standards,” but also prohibits “free-riders.” 

This is why several leading tech firms and startups are considering moving their headquarters to Hong Kong or expanding to the city, he said but did not provide names.

And that’s not all. Speaking at the same event, Joseph Chan, Undersecretary for Financial Services and the Treasury, said that Hong Kong is preparing to issue more licenses for digital asset trading firms, and is planning a consultation on crypto platforms, where it would explore the potential for retail participation in the crypto industry. He said that the details would be published soon.

Hong Kong going crypto on several fronts

Hong Kong seems to be working hard on its digital assets-related plans.

As reported just days ago, the city’s financial services firms are getting ready to enable their retail clients to trade digital assets in the coming months, following the Anti-Money Laundering and Counter-Terrorist Financing Act passed by the Legislative Council. “We have seen a lot of local brokers and fund managers seeking advice from us about the licensing requirements under the new regulatory regime,” Robert Lui, digital asset leader at Deloitte Hong Kong, was quoted as saying. Authorities are likely to allow retail investors with a large market capitalization and liquidity to trade these assets, he added.

In mid-December 2022, two exchange-traded funds (ETFs) – CSOP Asset Management’s Bitcoin Futures ETF and Ether Futures ETF – debuted in Hong Kong as the first of their kind in the city.

In November, Hong Kong said it would issue tokenized government green bonds and revealed several pilot programs, one of which was the issuance of a new batch of tokenized green bonds for institutional investors.

Hong Kong is also working on the central bank digital currency (CBDC). It was reported in September that it would start testing out a digital coin called the e-HKD in the fourth quarter, laying the groundwork for a digital currency to be implemented and eventually used by the public to shop, make money transfers, etc. The pilot scheme would be accompanied by law changes and digital infrastructure to support the e-HKD. 

Also in November, it was said that Mainland China and Hong Kong were set to co-launch the digital yuan’s first cross-border pilot project – as the People’s Bank of China (PBoC)-led project edges ever-closer to roll out.

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Learn more: 
– Hong Kong Slips Down the Crypto Hub World Rankings
– Government Official: FTX Collapse Will Not Stop Hong Kong Becoming Virtual Asset Hub

– Hong Kong Regulator Set to Allow Retail Investors Access to BTC, Ether ETFs
– Hong Kong May Allow Direct Crypto Purchases

– KPMG & Aspen Digital Study Reveals Wealthy Asian Investors Are Keen On Crypto
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