Hong Kong, one of the world’s biggest financial hubs, has long been engaged in cryptocurrency and blockchain technology – but it faces a competitive challenge from the crypto-friendly UAE.
This was a fact acknowledged by panelists Joseph Chan, Under Secretary for Financial Services and Treasury in Hong Kong, and Johnny Ng, founder of web3 investment firm Goldford Group, who spoke at Consensus Hong Kong.
“The UAE is really aggressive,” said NG, who has served as a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) since 2018.
He said places like Dubai and Abu Dhabi have established a solid regulatory framework for virtual assets, and each region has also brought this under the auspices of a single, dedicated regulator. Korea, which boasts many millions of crypto users and investors, also has a special government agency responsible for crypto issues, Ng added.
“I think Hong Kong’s Legislative Council can recommend that the government do more, especially by creating one position to oversee all these things,” Ng said. “As a legislator, I actually want to help the government connect with congressmen from other countries, for example Korea.”
Chan from Hong Kong’s Ministry of Finance said a continuing attraction for Hong Kong is that there are “no surprises” from regulators, who have shown a consistent commitment to digital assets.
“Our regulation is transparent, secure and predictable, and we’ve stuck to that all along,” Chan said. “This compares to some other jurisdictions, without naming any names. Whether it’s during a crypto winter or not, Hong Kong has been at the forefront of the development of the digital asset industry. If you look at other jurisdictions, when things change and there are ups and downs, they can flip-flop.”
Under Hong Kong’s compulsory licensing scheme for virtual asset trading platforms (VATPs), 11 licensees have been awarded under the framework, which came into effect two and a half years ago.
Regarding the stablecoin regulatory regime that started last August, Chan said the first batch of licenses is targeted for the first quarter of this year.
The licensing scheme for digital asset dealers and custodian banks is next, and is expected to be tabled by Hong Kong’s finance secretary later this year, Chan added, pointing to more consultations and bill readings to take place first.
“It sounds like a long process, but it’s very important,” Chan said. “Because it means everyone from the industry knows what’s coming, there’s enough time to raise your concerns so there won’t be any surprises and everyone knows what’s going to happen next.”
