Hong Kong’s aspiration to become a leading digital asset hub gains momentum as industry experts anticipate a surge in cryptocurrency adoption. Jupiter Zheng, a partner at Hashkey Capital, underscores Hong Kong’s readiness for this transition, fueled by a significant influx of crypto expertise. This readiness is a beacon of hope for the city’s economy, which has been grappling with the challenges of COVID-19 and a need for new economic drivers.
At the helm of liquid funds and research in HashKey Group, Zheng points out the city’s burgeoning number of Web3 projects. These initiatives and favorable regulatory changes set the stage for Hong Kong’s crypto market expansion over the next four to five years. Despite the bearish trend in crypto pricing, the underlying technical advancements and level of expertise developed over the past 18 months are noteworthy.
In a recent development, Hashkey, Hong Kong’s premier cryptocurrency exchange, received regulatory approval to offer cryptocurrencies to the public. This move, reflecting the government’s commitment to a robust regulatory framework, aims to boost investor confidence in the crypto sector. Not directly involved in the exchange’s operations, Zheng anticipates increased demand for crypto products from local citizens, buoyed by the new policy changes that promise greater security and legal safeguards.
This optimism is not without its challenges. The region recently witnessed one of its most significant financial setbacks with the JPEX crypto exchange scam. The event, which resulted in substantial financial loss for investors, underscored the need for stricter regulatory measures. In response, Hong Kong’s Financial Services and the Treasury Secretary, Christian Hui, reaffirmed the government’s resolve to fortify its position as Asia’s crypto hub, undeterred by the JPEX incident.
The Security and Futures Commission (SFC) of Hong Kong has responded proactively, revising laws related to cryptocurrency sales and launching a joint task force with the police to combat illegal crypto exchange activities. These measures are critical to ensuring a more secure and regulated environment for cryptocurrency transactions.
Zheng draws parallels between the current state of Web3 in Asia and the GameFi industry’s rise in 2021, marked by the success of games like Axie Infinity. He anticipates a similar growth trajectory for Web3 in Hong Kong, albeit with a more focused approach to blockchain protocols and infrastructure, moving away from the speculative frenzy that once dominated the region.
