Hong Kong determined to compete for global virtual asset hub

Author: Zhou Zhou

Hong Kong has made up its mind to compete with Singapore, London, New York and other cities for the status of global crypto financial center and virtual asset center.

On October 16, Hong Kong Financial Secretary Chen Maobo published an article “Hong Kong’s Innovation and Technology Development” and pointed out that Hong Kong should be promoted to develop into an international virtual asset center. Chen Maobo said: “The policy statement will clearly express the government’s position, show the global industry our vision to develop Hong Kong into an international virtual asset center, and our commitment and determination to explore financial innovation with the global asset industry.”

This also means that Hong Kong will further promote the development of NFT (abbreviation for Non-Fungible Tokens, that is, non-fungible tokens), Web3 and the cryptocurrency market, which are financial innovations and networks based on blockchain technology. Innovation.

Web3 is an Internet ecology based on blockchain technology. It is committed to decentralizing or partially decentralizing the Internet, so that users can have more opportunities to control their own data, assets and digital identities. This new form of digital economy has attracted a lot of investment. According to the latest data from McKinsey, in the first half of 2022, venture capital investment in Web3 exceeded 18 billion US dollars, and the total venture capital investment in 2021 was 32.4 billion US dollars.

Since this year, financial centers in many countries and regions around the world have announced that they will become virtual asset centers, encrypted financial centers, and attract entrepreneurs and companies in this field.

At the Hong Kong Fintech Conference at the end of October, some innovations related to web3 will be showcased. Chen Maobo revealed that this year’s Hong Kong Fintech Week will include concepts such as Web3 and the Metaverse, including the use of non-fungible tokens (NFTs). A limited-edition Proof of Attendance protocol token will be distributed to participants. Token holders will be able to create an exclusive virtual avatar through 3D scanning at that time to provide visitors with a new experience. They can also use the tokens to participate in other industry events preferentially in the future. This form of issuing NFT participation certificates to participants has become a trend. This certificate often has no entity and is just a network certificate. However, because it is made into NFT, it has the value of collection and transaction.

Within Asia, cities (countries) that hope to become global encrypted financial centers and virtual asset centers include but are not limited to Tokyo, Singapore, Seoul, Bangkok, etc.

In May 2022, Japanese Prime Minister Fumio Kishida said that the arrival of the Web3 era may lead to (Japan) economic growth. He mentioned that integrating new digital services such as the Metaverse and NFTs will bring economic growth to Japan. “As we move into the Web3 era, I feel strongly that we have to push this environment resolutely from a political standpoint.”

A Tokyo city councillor, Yu Ito, has opened up about plans to transform Tokyo into a crypto-financial center, claiming that embracing crypto assets could help Tokyo compare favorably with London and Hong Kong.

Singapore is often compared with Hong Kong because of the convergence in population, urban area, and financial policies. At the end of September, the “TOKEN 2049” encryption conference in Singapore just ended, attracting 7000+ attendees, 2000+ companies and 250+ sponsors around the world, and hundreds of events were held.

According to the “2022 Global Blockchain Talent Report – Web 3.0 Direction” released by the data asset trading website OKX and the third-party recruitment platform LinkedIn, as of June 2022, the United States, India, China, the United Kingdom and Singapore are the global TOP 5 Blockchain Talent Country. Among them, Singapore’s talent growth rate is relatively high.

Outside of Asia, in April 2022, British Chancellor of the Exchequer Rishi Sunak tweeted: “We are working hard to make the UK a global center for crypto assets.” An article in the Global Crypto Asset Technology Center, announcing a partnership with the Royal Mint to develop NFTs. In the United States, Miami Mayor Francis Suarez proposed to make Miami the new Silicon Valley of Web3; New York Mayor Adams said that New York is the center of the world and hopes it will become an innovation center for cryptocurrencies and other finance.

Financial technology is the advantage of Hong Kong, China. So far, there are more than 600 financial technology companies in Hong Kong, China, whose business covers mobile payment, cross-border wealth management, virtual asset trading, etc., and has a strong precipitation in the field of financial technology. Since the beginning of this year, many officials of the Hong Kong government have continued to speak out, seeking to develop the encrypted finance and digital asset industries.

In August 2022, Tsang Junhua, the former Financial Secretary of Hong Kong, China, said that the virtual economy is very important to Hong Kong and encourages the younger generation to actively participate and adopt technology through Web3; Set up a cross-border digital currency trading center; in the same month, Chen Haolian, deputy director of the Hong Kong Treasury Bureau, pointed out that security token issuance has already been issued in Hong Kong, and he emphasized that the government is committed to supporting the steady development of financial technology including security token issuance in Hong Kong.

Of course, there are still many challenges in the development of Web3 in Hong Kong, China. It is not as open as Singapore and South Korea in terms of policy opening; it is not as good as Shenzhen, Beijing and other first-tier cities in mainland China in terms of technical talent reserves; it is far less than the United States in terms of the number of Web3 companies New York and Silicon Valley. How to differentiate and compete with other financial centers around the world in the field of encrypted finance and find the most suitable development path has become a problem that the financial industry in Hong Kong, China is thinking about.

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