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Hong Kong maintains its dedication to digital assets while facing competition from a ‘competitive’ UAE.
Dubai and Abu Dhabi have implemented a robust regulatory framework for virtual assets, consolidating this under a singular, dedicated regulatory authority in each region.
(L to R) Johnny Ng, Joseph Chan, Gary Liu (CoinDesk)
What to know:
- A member of the China National Committee mentioned that Hong Kong could learn from the UAE and Korea in terms of crypto regulation during discussions at Consensus Hong Kong.
- The undersecretary for Hong Kong’s Treasury noted that a persistent appeal of Hong Kong is the predictability from regulators.
As one of the leading financial centers globally, Hong Kong has been dedicated to cryptocurrency and blockchain technology; however, it currently encounters competition from the crypto-friendly UAE.
This competitive dynamic was recognized by panelists Joseph Chan, under secretary for financial services and the treasury in Hong Kong, and Johnny Ng, founder of the web3 investment firm Goldford Group, who addressed the topic at Consensus Hong Kong.
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“The UAE is very proactive,” stated Ng, who has been a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) since 2018.
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He highlighted that regions such as Dubai and Abu Dhabi have developed a strong regulatory framework for virtual assets, and each has placed this under a singular, dedicated regulatory body. Ng also mentioned that Korea, which has a large number of crypto users and investors, has a specific governmental agency dedicated to crypto matters.
“I believe the legislative council in Hong Kong could suggest that the government take further steps, particularly by establishing a position to oversee all related aspects,” Ng remarked. “As a lawmaker, I will actively assist the government in connecting with legislators from other nations, such as Korea.”
Chan from the Hong Kong Treasury emphasized that a lasting allure of Hong Kong is the absence of unexpected changes from regulators, who have consistently supported digital assets.
“Our regulatory framework is clear, consistent, and reliable, and we have maintained this throughout,” Chan explained. “This stands in contrast to certain other jurisdictions, which I won’t specify. Whether during a crypto downturn or otherwise, Hong Kong has consistently endorsed the growth of the digital asset sector. In comparison, other jurisdictions may experience fluctuations in their approach as circumstances evolve.”
Under Hong Kong’s compulsory licensing system for virtual asset trading platforms (VATPs), 11 licenses have been issued since the framework was implemented two and a half years ago.
Concerning the stablecoin regulatory framework that commenced last August, Chan noted that the initial set of licenses is anticipated for the first quarter of this year.
The licensing framework for digital asset dealers and custodians is next in line and is expected to be presented by Hong Kong’s financial secretary later this year, Chan mentioned, indicating that several consultations and readings of the bill must occur beforehand.
“It may seem like a lengthy process, but it is crucial,” Chan stated. “This ensures that everyone in the industry is aware of what to expect, allowing ample time to voice concerns, preventing unexpected developments and ensuring transparency about future procedures.”
