Currencies

Digital currency firms eye operations in Hong Kong: Financial secretary

Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui, has confirmed that several digital asset companies are keen on establishing a presence in the region.

Hui disclosed this at the recently concluded Aspen Digital Web3 Investment Summit, noting that recent government initiatives have triggered a wave of global corporate interest in the country. Over 80 Web3 firms are mulling over setting up shop in Hong Kong, with 23 companies taking preliminary steps.

The Financial Secretary noted that the firms range from digital currency exchanges, blockchain technology and security firms, and wallet services providers. A bulk of the interested entities originate from the United States, Europe, Canada, and other Asian countries, with some coming from Mainland China, a region with a stifling blanket ban on digital currency activities.

“Hong Kong is well-positioned to be a leading hub for Web3 in Asia and beyond, and we attach great importance to virtual assets (VA) and Web3,” said Hui. “The Government has a high-level commitment to developing the sector and providing a comprehensive support system to enterprises that are passionate pioneers and start-ups in this area like all of you.”

The release of a Policy Statement signaled a clear statement of intent by Hong Kong’s government to play a lead role in digital asset development. The document promised a lower tax burden and other perks, such as the ease of obtaining employment visas and other relevant support.

Hong Kong has more than 800 fintech firms in the country, but before the recent development, the region was plagued by tightening government policies that threatened the local ecosystem. The result was an exodus of hundreds of firms searching for greater clarity, with Seychelles and the Caribbean countries being the preferred destination.

To lure in global digital currency firms, the Hong Kong government approved three digital currency Futures Exchange Traded Funds (ETFs) and is working on launching a robust stablecoin regulation. In a bid to provide a healthy talent pool for the incoming firms, the government is working on a new internship scheme for students with the additional provision of subsidies.

A total of $50 million was earmarked from Hong Kong’s budget to trigger growth in the local Web3 ecosystem by organizing industry-related events and “promote cross-sectoral business co-operation.” A task force has since been established to assist the government in achieving its lofty ambitions.

Hui added that the preliminary work on the e-Hong Kong dollar is underway, and a collaboration with the People’s Bank of China (PBoC) is in the works to improve the state of cross-border transactions in the region.

Watch: The Future of Digital Asset Exchanges & Investment

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