Hong Kong Sets Aside HK$50 Million for Web3 Sector

Hong Kong’s authorities have committed to expanding their exposure to cryptocurrencies

The SFC has proposed a six-week period to allow for the trading of digital assets in Hong Kong

Authorities in Hong Kong have announced intentions to set aside HK$50 million (US$6.4 million) to support the city’s Web3 industry as part of efforts to become a major crypto hub in Asia.

Hong Kong intends to construct a research center to boost the development of microelectronics and artificial intelligence. HK$50 million will be set aside to develop the Web3 ecosystem there.

The money will be used to host important international conferences, cross-sector corporate partnerships, and youth programmes.

Paul Chan, the financial secretary of Hong Kong, revealed the formation of a task force made up of representatives from the sector, regulatory agencies, and policy bureaux to develop virtual assets.

Notwithstanding the continued market instability, Hong Kong’s authorities have demonstrated a commitment to expanding the territory’s exposure to cryptocurrencies and blockchain technologies. Chan claimed in November of last year that even if the sudden collapse of FTX had shook cryptocurrency market, Hong Kong’s aspirations for the industry will not be affected.

The official who has been Hong Kong’s financial secretary since 2017 said, “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.”

Future plans of SFC

The city’s primary securities regulator, the Securities and Futures Commission (SFC), made a suggestion that it would pursue plans to make exchange-traded funds (ETFs) that follow cryptoasset futures accessible to regular investors in the same month. The first two exchange-traded funds (ETFs) of their kind in the Chinese city of Hong Kong debuted in December 2022 with the launch of CSOP Asset Management’s Bitcoin Futures ETF and Ether Futures ETF.

John Lee, the city’s chief executive, disclosed that the government would establish a new investment firm called Hong Kong Investment Corporation Limited in his policy address in October.

According to Lee’s policy address, the government has allocated approximately $3.8 billion (HK$30 billion) for a co-investment fund aimed at luring foreign companies to Hong Kong.

At Hong Kong FinTech Week in November, the city outlined its goals for becoming a center for virtual assets once more.

Who will be given Access to Crypto

Retail consumers will be needed to pass a knowledge assessment or will only be granted access when training is completed, according to the plan, which will be presented for six weeks to garner feedback from “interested parties.”

The SFC also declared that all trading platforms for digital assets situated in Hong Kong or actively promoting to investors must have a license. The industry has welcomed Hong Kong’s recent legislative changes, and both institutional and retail-focused cryptocurrency companies are anxious to open offices there.

The biggest bank in Southeast Asia, DBS, stated last week that it was applying for a license that would allow it to provide cryptocurrency trading to Hong Kong clients.

Will there be a tax rate

As mandated by the Organization for Economic Cooperation and Development (OECD), authorities intend to establish a global minimum effective tax rate of 15% on large multinationals, defined as those with a global turnover of at least €750 million (US$800 million), starting in 2025.

According to Hong Kong’s top financial official, there is a proposal being created to tax earnings recorded by businesses selling equity shares, combined with a potential penalty on soccer wagering of HK$2.4 billion year over the following five years.

The administration said that it has identified eight plots of land for light public housing and will lower the stamp duty, a tax on real estate transactions, for first-time homeowners in an effort to address the city’s infamous housing crisis.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing