Hong Kong is becoming a favorable location for numerous cryptocurrency-related technology companies because of its strong policies and clear regulations in the cryptocurrency market.
In October 2022, the Hong Kong government announced its intention to attract innovative cryptocurrency-related businesses. Financial Secretary Paul Chan stressed that Hong Kong aims to become a cryptocurrency hub and the Hong Kong government will develop regulations stably.
Since June 2023, investors have been able to trade cryptocurrencies, and a strict licensing system for crypto service providers has been implemented to protect investors. In March of this year, the government also established a regulatory sandbox for companies planning to issue stablecoins.
The OSL cryptocurrency exchange is one of the few companies licensed by the government, and the company’s chief financial officer, Hu Zhenbang, is one of those who has seen the benefits of Hong Kong’s crypto policy.
According to him, the Hong Kong government’s clear stance on cryptocurrencies and the actual law have greatly strengthened his confidence in the future of the Hong Kong cryptocurrency market. He noted that there was a time when some cryptocurrency-related companies moved from Hong Kong to Singapore, but over the past year, many of them have returned to Hong Kong.
One advantage that could significantly contribute to the development of the Hong Kong cryptocurrency market is the tax system. When investing in cryptocurrencies in Hong Kong, there is no tax on the increase in asset value.
The government’s efforts to clarify regulations regarding cryptocurrency activities and emphasis on dialogue with companies are also beneficial for investors.
Hong Kong’s regulation of exchanges is stringent. The Securities and Futures Commission (SFC) has issued warnings to OKX, Gate.io, and HTX for not completing their applications before the June 1 deadline.
Read more: OKX, Gate.io, and HTX withdraw VASP license application in Hong Kong
Operating an exchange without a license is illegal in Hong Kong and at the request of the SFC, Hong Kong police have blocked the offending companies’ websites and social media accounts.
Steve Yeung, chairman of the Dubai-based TON Foundation, praised Hong Kong for “trying to create a comprehensive framework that developers and entrepreneurs can feel comfortable with and attract talent.” He said Hong Kong may have a significant advantage over other cryptocurrency hubs in this regard.
Last month, the Legislative Council of the Hong Kong Special Administrative Region set up a subcommittee focused on advancing the development of Web3 and cryptocurrencies in Hong Kong. The objective is to promote the growth of Web3 and cryptocurrencies in Hong Kong by formulating policies based on industry insights and positioning Hong Kong as a leading hub for Web3 technologies.
In April of this year, over 50,000 individuals assembled at the annual Web3 Festival in Hong Kong. At the event, Cathie Wood, the CEO of the US hedge fund giant ARK Invest, delivered a speech via video. The event was also co-hosted by Ethereum founder Vitalik, who also took the stage.
American crypto media outlet CoinDesk has announced that its major crypto conference, “Consensus,” will be held at the Hong Kong Convention and Exhibition Center in February 2025. The company touts Hong Kong’s strategic position as a cryptocurrency hub in the Asian region as a driving force behind Web3.
