The city of Hong Kong is serious about cryptocurrencies. After three years of struggling with Covid-19, the city is vibrant and thriving again as business and tourists of all kinds return to Asia's financial hub. New guidelines issued by the Securities and Futures Commission pave the way.
Since Hong Kong FinTech Week last year, regulators have built a comprehensive licensing system for digital assets. Digital assets are regulated under the “same business, same risks, same rules” principle, and digital assets are now treated with similar rules to traditional finance. This has led to breakthrough moments for the industry this year, such as when Hong Kong-licensed exchange HashKey launched a digital asset exchange app, and several traditional financial institutions obtained relevant licenses that allow them to offer retail trading of digital assets.
This has been made possible thanks to the comprehensive strategy adopted by the Hong Kong government to make the city a desirable Web3 hub. It was started with the aim of improving foreign investment and talent recruitment.
The Hong Kong government sees the digital asset industry as the driving force behind its migration and foreign investment to the city. Other steps taken by the Hong Kong government in this area include: announcing a series of policies focused on attracting family offices overseas with tax incentives and launching a scheme allowing the purchase of Bitcoin through compliant exchanges which is currently under consideration by the Hong Kong Investment Immigration Authority Kong. program.
By attracting foreign investment and the best talent, city leaders hope to restore business confidence and a more diversified digital economy. In addition, the updated Immigration Talent Scheme is designed to attract high earners and foreign graduates from top universities. So far, the Labor Minister revealed that the office has received more than the expected number of applications. All of these efforts will lay a stronger foundation for the city to have a diverse talent pool for the digital economy.
Digital asset licensing has opened up opportunities to create powerful Hong Kong-based crypto companies. At Metalpha, we have recently received an upgrade to our Type 4 (Securities Advisory) licence. This will enable us to expand our advisory and analytics efforts, and allow us to publish reports to qualified investors about digital assets. This is a major milestone for us and also shows the confidence SFC has in our business approach.
In fact, since the beginning of this year, we have seen strong demand from family offices and public companies wondering how to invest in Bitcoin in a compliant way. Smart investors who understand the hype and beyond the negative headlines are rewarded with clear opportunities to grow and leverage cryptocurrencies and Web3. I believe that more companies will apply for licenses to attract investment, enhance their business credibility, and seek new opportunities as a result.
A recent report in the Financial Times shows that Hong Kong is expected to overtake Switzerland as the world's leading country in cross-border wealth management, with Asia leading the growth. This massive shift in global wealth represents a great opportunity for investors looking into digital assets. As regulations for the digital asset industry become clearer in the coming years, Hong Kong will emerge as a city that offers a balanced approach to innovation and risk assessment.
Looking forward to the new year, I am confident that Hong Kong will continue to play a key role in building Web3's position and enter into more direct competition with Singapore, which has had an early mover advantage in the cryptocurrency space. This is good. Investors should have more options to choose the best cryptocurrency projects or companies to work with. As for customers, it will boost confidence once they know that their service provider is safe and compliant in the eyes of regulators.
This is a guest post by Adrian Wang. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.