Hong Kong to Start Regulating Crypto in June 2023, 80 Companies Want to Join

Christian Hui, the Secretary for Financial Services and the Treasury in Hong Kong, was one of the speakers at the Aspen Digital Web 3 Investment Summit on 20 March 2023. During his speech, which focused on building the position of China's Special Administrative Region as a leader in the Web3 revolution, he revealed that since October last year, more than 80 foreign and Mainland China crypto companies had expressed interest in establishing a branch in Hong Kong and obtaining local licenses.

Hong Kong Attracts Cryptocurrency Companies

In October last year, Hong Kong published a statement on the cryptocurrency market regulation, which indicated that it wants to apply the same laws to crypto exchanges as it does to traditional finance companies. Between then and the end of February 2023, a sizable number of domestic and international firms expressed their interest in having a presence in Hong Kong.

23 of the 80 mentioned are already working to build their local presence, including cryptocurrency exchanges, blockchain infrastructure companies or cryptocurrency network security providers.

"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. These companies included VA exchanges, blockchain infrastructure companies, blockchain network security companies, virtual currency wallets and payment companies, as well as other projects on building the Web3 ecosystem," Hui said during the conference.

Christopher Hui, Secretary for Financial Services and the Treasury Bureau, delivers the opening keynote and reinforces HK government’s vision to develop the virtual asset sector in Hong Kong.He mentions Web 3 presents a paradigm shift to the internet era. pic.twitter.com/9MGkWOCj0O

Hong Kong to Regulate Cryptocurrencies from June 2023

The Secretary for Financial Services and the Treasury acknowledged that regulations planned since last year to establish a licensing regime for the virtual asset (VA) service providers should come into effect in June 2023, within the next three months.

"Through the establishment of a comprehensive and clear regulatory system, we are expecting more quality VA enterprises to set up businesses in Hong Kong or to seek development opportunities in Hong Kong," Hui added.

In addition, Hui recalled that the Hong Kong Monetary Authority (HKMA) is working on stablecoin regulations, which are expected to come into effect in 2024. In addition to the work being carried out by the HKMA, Hong Kong wants to implement the ability to offer cryptocurrency exchange-traded funds (ETFs) to retail investors.

Hong Kong has earmarked $50 million in its latest budget to develop the web3 ecosystem and to build its presence in the virtual assets world by organizing conferences and attracting companies from the sector.

"While the Government will strive to cultivate a Web3-friendly environment for the industry to thrive, we also count on all of you to make best use of your expertise and develop in Hong Kong," Hui concluded his speech.