• Hong Kong is actively promoting the development of Web3 by establishing a task force dedicated to ethically promoting its growth and innovation.
• The Securities and Futures Commission (SFC) has granted licenses for retail crypto exchanges in accordance with its new crypto licensing regime.
• Large banks in Hong Kong remain hesitant about engaging directly with crypto clients, despite progress in the regulatory landscape.
Hong Kong’s Ambitions in the Crypto Space
Hong Kong is actively pursuing its ambition of becoming a major crypto hub, as it promotes the development of Web3 and imposes regulations on the crypto space. The Securities and Futures Commission (SFC), Hong Kong’s main financial regulator, have granted licenses to exchanges under their new framework. Furthermore, the government has established a task force dedicated to ethically promote the growth and innovation of Web3.
Regulation on Retail Crypto Exchanges
Under the SFC’s new rulebook, retail investors in Hong Kong are able to trade certain “large-cap tokens” on licensed exchanges when safeguards such as knowledge tests, risk profiles, and reasonable exposure limits are implemented. Animoca Brands co-founder and executive chairman Yat Siu believes that this demonstrates commitment from the government towards creating an environment that is conducive for Web3 projects. Matthew Cheung, chief strategy officer of one of SFC’s first approved exchange – Hong Kong Virtual Asset Exchange also sees this as an opportunity for compliant exchanges to develope further in this space.
Banks Reluctance Towards Crypto Clients
Despite progress in the regulatory landscape, large banks in Hong Kong still remain reluctant about engaging directly with crypto clients. In June 2020, banking regulator HKMA asked HSBC , Standard Chartered , and Bank of China to engage with potential customers more closely – however this request was not met favourably due to security concerns from these banks.
Executives Weighing In On Web3 And Regulation
Yat Siu expects more activities related to Web3 happening in Hong Kong such as events being held there or companies choosing it as their headquarters due to its supportive environment towards such initiatives while Matthew Cheung believes that SFC’s transparent approach creates opportunities for those who meet regulation standards within this sector .
Conclusion
In conclusion , despite certain hesitations from large banks regarding engagement with cryptocurrency clients , overall it can be seen that Hong Kong is making progress towards developing itself into a major player within Web 3 through various approaches such as setting up a taskforce along with granting licenses for retail crypto exchanges amongst other measures .