Representatives of the government of the People’s Republic of China were frequent guests at various crypto events in Hong Kong for several months. The industry representatives attribute this to Beijing’s subtle support for local crypto initiatives.
Officials from the PRC were frequent guests at various crypto events in Hong Kong in recent months. They reviewed reports and discussed trends in crypto initiatives, showing a high interest in developing the local cryptocurrency market from the PRC government. This was reported by Bloomberg.
According to the publication, members of the local crypto industry are confident that the increased interest from Chinese officials indicates that Beijing is interested in using Hong Kong as a “testing ground” for digital assets. In light of the news, some crypto firms even hoped to bring their business back to China.
Recall that Hong Kong is considered the world’s most advanced jurisdiction in crypto adoption, while any crypto activity falls under strict government control in China.
The other day, the main regulator of the crypto market in the region, Hong Kong’s Securities and Futures Commission (SFC), announced plans to license cryptocurrency exchanges. Under the SFC’s plan, the license would allow regional traders access to crypto trading platforms that can provide robust investor protections.
This approach received public approval, and some cryptocurrency companies expressed a desire to expand their presence in the region. For example, Justin Sun, Founder of Tron Foundation and Huobi Global Advisory Board Member, spoke about the company’s plans to obtain a license for crypto trading in Hong Kong and open a regional exchange, Huobi Hong Kong. The new exchange will focus on trading services for institutional investors and high-net-worth individuals in Hong Kong.
Wealthy investors from Hong Kong have a keen interest in the cryptocurrency market. Thus, over half of the millionaires in the region already invest in digital assets, and about a third more plan to make such investments in the near future.
Large financial market players also want to provide their services in the region. For instance, Interactive Brokers, a NASDAQ-listed brokerage firm, announced the launch of crypto trading services for institutional investors in Hong Kong. Plans to expand its cryptocurrency services in the region and obtain a license were reported by representatives of Singapore state-owned megabank DBS Group Holdings Ltd. And Sam Park, CEO of Samsung Asset Management in Hong Kong, said the company was considering launching a spot-based Bitcoin ETF in the region.
Hong Kong’s financial sector actively explores innovative technologies and their impact on financial transactions’ security, transparency, and efficiency. A recent successful release of tokenized green bonds worth HK$800 million (~$100 million) served as an example of the application of new technologies. By the way, the assets were issued on the GS DAP platform launched by Goldman Sachs last month.
Blockchain and crypto initiatives in Hong Kong receive significant financial support as well. For instance, HashKey Capital announced the closure of its round of investments in FinTech Investment Fund III. The fund attracted $500 million, which will be used to promote startups and projects in the Web 3.0 space.
Hong Kong is among the top ten most crypto-friendly jurisdictions regarding tax policy for long-term investments in digital assets.
