The financial secretary of Hong Kong stated that despite volatility in the cryptocurrency market, this is the “perfect time” for Hong Kong to advance with Web3.
Paul Chan detailed that one of the three main approaches he has suggested in the city’s budget was for the advancement and deployment of the Web3 in a blog post from April 9.
Chan stated that Hong Kong will implement a strategy that stresses both ‘appropriate regulation’ and supporting development in order for Web3 to steadily travel the path of innovative development.
According to Chan, the country also intends to concentrate on financial security, minimizing systemic risks, and putting an emphasis on investor education, protection, and anti-money laundering measures.
The Hong Kong government first suggested proposing legislation to control cryptocurrency in October of last year.
Hong Kong on crypto regulation
The local securities authority in Hong Kong, the Securities and Futures Commission (SFC), published a proposal for a regulation of cryptocurrency exchanges on February 20 of this year, with an implementation date of June 1.
The industry has been experiencing a brutal bear market, setbacks like exchange crashes, and constant regulatory scrutiny.
Chan claims that the market is merely going through the same process the Internet did in the early 2000s when the “bursting of the bubble” caused investors to become much more composed.
“Even though the direction of progress is set, the real path must be worked out step by step; only by persevering in our efforts can we uncover new solutions and new ways out.”
Chan noted that the surviving strong firms will put more effort into competing in technological innovation, real-world application, and value creation as the tide of speculation recedes. He added that this will help to raise the standard of the real economy.
“Market participants need to deepen the development of blockchain technology in the subsequent stage so that its characteristics and benefits of transparency, efficiency, security, disintermediation, deplatformization, and low cost can find broader application scenarios and address more existing problems.”
Hong Kong’s attitude to cryptocurrency regulation is very different from that of the US, which has taken a more rigid stance, which has given rise to speculation that the “center of gravity” of the crypto business would move to Hong Kong.
Following the local government’s proposed 50 million Hong Kong dollar ($6.4 million) capital injection into Web3 in the city’s 2023–24 budget, cryptocurrency exchange Gate.io has already made arrangements to establish a foothold in the country.
Christian Hui, the secretary for financial services and the treasury claimed in a speech on March 20 in Hong Kong that since October 2022, the country has been gaining “attention” from various crypto enterprises globally.
In his most recent post, Chan stated that the path of innovation and technological progress has never been easy sailing.
