Hong Kong’s Web3 Sector Gets HK$50 Million Boost in Annual Budget – Here’s the Latest

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Jaroslaw Adamowski

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Jaroslaw Adamowski

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June 26, 2023 06:55 EDT

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In line with plans to establish itself as a leading crypto hub in Asia, Hong Kong authorities have unveiled plans to set aside HK$50 million (US$6.4 million) to boost the city’s Web3 sector.

“The third generation Internet (Web3), currently in its start-up period, has the same huge potential.  We must keep up with the times and seize this golden opportunity to spearhead innovation development,” Paul Chan, the city’s Financial Secretary, said in a budget speech on the 2023-2024 period.

Referring to the government-run incubator Cyberport, the official noted that, earlier this year, the entity established a new blockchain-focused initiative, the Web3 Hub@Cyberport.  

“I will allocate $50 million to expedite the Web3 ecosystem development by, among other things, organizing major international seminars, to enable the industry and enterprises to better grasp frontier development and to promote cross-sectoral business co-operation, as well as arranging a wide array of workshops for young people,” the financial secretary said.

“Over the past few months, a large number of innovative enterprises with potential have been considering setting up business in Hong Kong.  For the next step, I will establish and lead a task force on VA development, with members from relevant policy bureaux, financial regulators and market participants, to provide recommendations on the sustainable and responsible development of the sector,” according to Chan.

Hong Kong’s authorities have shown determination to continue developing the territory’s exposure to blockchain technology and cryptocurrencies despite the ongoing market turbulences. Last November, Chan stated that while the abrupt collapse of major crypto exchange FTX has shaken the cryptocurrency markets across the world, it will not hamper Hong Kong’s crypto-related plans.

“Our policy statement released recently is conducive to building such an environment and has made the industry very hopeful about the development of Hong Kong’s virtual asset market,” said the official who has served as Hong Kong’s financial secretary since 2017.

The same month, the Securities and Futures Commission (SFC), the city’s top securities regulator suggested it will pursue plans to enable retail investors to access exchange-traded funds (ETFs), which track cryptoasset futures. In December 2022, two exchange-traded funds (ETFs) – CSOP Asset Management’s Bitcoin Futures ETF and Ether Futures ETF – made their debuts in Hong Kong as the first of their kind in the Chinese city.

At the same time, crypto investors have been increasingly worried about the Chinese territory’s regulatory ambiguity on digital assets and potentially negative legislative developments. As of last January, the city’s financial services firms were getting ready to enable their retail clients to trade digital assets in the coming months, following the Anti-Money Laundering and Counter-Terrorist Financing Act passed by Hong Kong’s Legislative Council.