Hong Kong Establishes Subcommittee to Draft Cryptocurrency Regulations, Aiming to Lead Digital Asset Space

Hong Kong in efforts towards becoming a leading regional hub for digital assets with the establishment of a new subcommittee dedicated to drafting comprehensive cryptocurrency regulations. Johnny Ng Kit-Chong, a member of the Hong Kong Special Administrative Region (HKSAR) Legislative Council, announced on 22 June, 2023.

To promote the development of Web3 and virtual assets in Hong Kong, the HKSAR Legislative Council recently established a Subcommittee on Web3 and Virtual Asset Development,” Ng stated. “My office seeks to gather insights from the global Web3 industry, propose policy recommendations, and discuss the future direction of the industry in Hong Kong.”

The creation of this subcommittee follows discussions earlier this year by the Hong Kong Securities & Futures Professionals Association (HKSFPA) regarding the establishment of a self-regulatory committee to oversee compliance within the crypto industry. “Many economically developed regions in the world have established statutory semi-official industry self-regulatory institutions to focus on industry development,” the HKSFPA noted.

The new subcommittee will focus on formulating Web3 policies and virtual asset regulations to create a balanced regulatory framework that fosters growth while protecting investors. The primary goal for Web3 policies is to promote the advancement of Web3 technologies within a structured regulatory environment. Additionally, the subcommittee will explore integrating artificial intelligence (AI) into the Web3 framework to enhance the efficiency and security of blockchain-based applications.

In the realm of virtual assets, the subcommittee will prioritize investor and consumer protection. This includes establishing regulations designed to bolster market confidence and mitigate risks associated with digital assets. Furthermore, it will evaluate the potential uses and risks of stablecoins within the Hong Kong market.

Elsewhere in Asia, a new report by Nomura has highlighted a growing interest in cryptocurrency investments, particularly in Japan. The report indicates that more than half of Japanese investment managers plan to invest in crypto, with 62% viewing it as a diversification opportunity alongside traditional assets like cash and stocks. Notably, 88% of respondents with a high level of knowledge about cryptocurrencies shared this view, suggesting that greater understanding can positively influence investment perspectives in digital assets. (Source: https://www.legco.gov.hk)