Hong Kong has seen massive interest from virtual asset-related firms as the city pushes toward reclaiming its position as a global crypto hub with a more friendly regulatory stance.
Christian Hui, Hong Kong’s Secretary for Financial Services and the Treasury said during a recent speech that more than 80 crypto-related companies had shown interest in establishing a presence in the city since October 2022.
“As of end-February 2023, Invest Hong Kong has received expressions of interest from over 80 virtual asset-related Mainland and foreign companies in establishing their presence in Hong Kong.”
Hui detailed that these companies include virtual asset trading platforms, blockchain infrastructure companies, blockchain network security companies, virtual currency wallets and payment companies, as well as other projects working in the Web3 space.
While the majority of these firms are from China, some other companies that have shown interest in repositioning to Hong Kong are from Canada, EU (European Union) countries, Singapore, the UK, and the US.
Hui noted that these companies were interested to learn more about the “implementation details” of the policy statement, regulatory requirements, visa requirements for talent admission, and targeted support measures for the virtual assets and Web3 sector.
The surge in interest came after the Hong Kong government released its policy statement on Virtual Asset Development in October 2022, clarifying its stance on virtual assets.
Hong Kong, once the world’s crypto hub, started to lose its position in mid-2022 amid increasing concern about the city’s regulatory ambiguity on crypto and the emergence of potential rivals like Singapore and Dubai that are considered more friendly to the crypto industry.
However, the city has recently adopted a more crypto-friendly stance in a bid to attract crypto companies again.
In February, Hong Kong’s Securities and Futures Commission (SFC) published a consultation paper on its proposed regulatory regime for crypto trading platforms. The new rules are set to come into effect starting in June and will require all crypto platforms to be licensed by the SFC.
The regulator also said that retail investors would be allowed to trade certain “large-cap tokens” on licensed exchanges, given that safeguards such as knowledge tests, risk profiles, and reasonable limits on exposure are put in place.
Prior to this, the Hong Kong government had allowed retailed investors access to exchange-traded funds (ETFs) investing in CME Group (CME) Bitcoin and Ether futures.
“Hong Kong is well-positioned to be a leading hub for Web3 in Asia and beyond, and we attach great importance to the virtual asset (VA) and Web3,” Hui said during the speech. He also noted this year’s budget allocation of HK$50 million ($6.4 million) to boost the city’s Web3 sector.
“The Government has high-level commitment of developing the sector and providing a comprehensive support system to enterprises which are passionate pioneers and start-ups in this area like all of you.”
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