Hong Kong ignited the spark of Web 3.0 in 2022, and now the fire is burning brighter, gradually gaining unstoppable momentum. Looking at the development of Web 3.0 in Hong Kong in 2024, while building a more stable and convenient market environment, it is also leveraging its long-standing advantage as a financial center.
Author: Lesean, MetaEra
On October 31, 2022, an online AMA session titled "The Tide Rises in Hong Kong, Interpreting Hong Kong's Crypto New Policies" was launched on Twitter Space. This one-hour live broadcast gathered many heavyweight figures from the Chinese-language Blockchain community, and tens of thousands of people flooded into the live room, as if it were a carnival, and also like cheering for the launch of a big ship.
At that time, the Hong Kong SAR government had just released the "Policy Statement on the Development of Virtual Assets in Hong Kong", in which the government outlined its policy position and guidelines: it will cooperate in the legal and regulatory system to provide a convenient environment.
In the blink of an eye, two years have passed. Web 3.0 in Hong Kong has evolved from a spark to an unstoppable wildfire. And that live broadcast with tens of thousands of people was the starting point of MetaEra's dream, and also the initial aspiration that we have been upholding in Hong Kong. Since its inception, MetaEra has been clearly positioned as a "globally leading media based in Hong Kong", with its influence radiating across Asia and even globally.
In early December 2024, Kang Jianping, a director of Hong Kong Cyberport Management Company Limited and chairman of Nano Labs, shared at a forum: "It was Hong Kong's positive attitude first, and then the Trump government's development of digital currency, that led to the rapid breakthrough of Bitcoin price above $100,000. I am optimistic about Hong Kong's development in the field of digital encryption and even the entire Web 3.0 field. Hong Kong may surpass New York to become the world's financial center."
This view is not without foundation. Looking at the development of Web 3.0 in Hong Kong in 2024, while building a more stable and convenient market environment, it is also leveraging its long-standing advantage as a financial center.
Table of Contents
Orderly Compliance, Steady Progress
Unlike other regions, Hong Kong's process of advancing Web 3.0 development is orderly and compliant. To avoid reckless growth, while granting freedom, the focus is on updating laws, industry regulation, issuing licenses, and promoting Stablecoins. Especially as an established financial center, Hong Kong's strict requirements and transparent standards for financial licenses and Virtual Asset Service Provider (VASP) licenses provide a safer way for relevant clients. On June 1, 2023, the Hong Kong government officially launched the VASP license application, requiring VASP to submit their license application by February 29, 2024. As of December 18, 2024, there are seven licensed Virtual Asset Trading Platforms (VATP) in Hong Kong, including OSL Exchange, HashKey Exchange, HKVAX, Yunzhanghao Greater Bay Area Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset Trading Group, and Thousand Whales Technology.
Stablecoins, as a type of virtual asset aimed at maintaining a relatively stable value against certain assets (usually currencies), can further integrate Hong Kong's traditional finance and virtual asset markets. In January 2024, to further promote the legislative process of the Stablecoin regulatory framework, the Hong Kong Monetary Authority (HKMA) issued a consultation paper proposing more detailed regulatory measures and for the first time clearly defining Fiat-Referenced Stablecoins (FRS). On March 12, 2024, the HKMA officially launched a regulatory sandbox for Hong Kong dollar Stablecoins, providing an effective channel for the HKMA and the industry to exchange views on the proposed regulatory regime. In the same month, to support the development of Hong Kong's tokenization market, the HKMA launched a new wholesale Central Bank Digital Currency (wCBDC) sandbox project called Ensemble. This sandbox puts Hong Kong at the forefront of Stablecoin legislation globally.
In July 2024, the HKMA and the Financial Services and the Treasury Bureau issued a "Consultation Conclusions Report on Legislative Proposals for Implementing a Regulatory Regime for Stablecoin Issuers in Hong Kong", where the HKMA for the first time explicitly accepted the tokenized form of high-quality and highly liquid assets as the reserve assets of issuers. On July 18, the HKMA released the list of participants in the Stablecoin Issuer "Sandbox", including Standard Chartered Bank in partnership with Animoca and Circle, HKT, and JD Digits.
On December 6, the Hong Kong government published the "Stablecoin Bill", aiming to introduce a regulatory regime for fiat-linked Stablecoin issuers in Hong Kong. The bill was first read on December 18, with the goal of improving the regulatory framework for virtual asset activities, addressing the potential risks of fiat Stablecoins to financial stability, ensuring adequate protection for users, and further consolidating Hong Kong's position as a global Stablecoin development and regulatory center.
In terms of Real World Assets (RWA), the HKMA issued a circular on "Sale and Distribution of Tokenized Products" in February this year to strengthen the management of institutions launching tokenized products. The Hong Kong Securities and Futures Commission stated in May that RWA investment may be opened to retail investors to attract more capital and FinTech talent to Hong Kong. In August, Ant Digital Technology announced a successful RWA financing of about 100 million RMB in Hong Kong in cooperation with Lanxin Group, which was selected as one of the first RWA tokenization cases in the HKMA's Ensemble sandbox project. On October 28, during the Hong Kong FinTech Week, Ant Digital Technology again publicly stated that it will focus on RWA business in Hong Kong and launch a "two-chain one-bridge" platform.
On August 28, 2024, the HKMA officially launched the "Ensemble" sandbox program, which will use experimental tokenized currencies to facilitate interbank settlements and focus on researching tokenized asset trading, marking the Hong Kong government's forward-looking layout in the field of asset tokenization and demonstrating its determination to become a global RWA tokenization center.
Multifaceted Support, Building an Ecosystem
As early as 2022, the Hong Kong government stated in its policy address that as an international financial center, it will support the innovation and ecosystem of international virtual asset businesses. The government will take the lead in issuing Non-Fungible Tokens (NFTs), promoting the tokenization of green bonds, and experimenting with the digital Hong Kong dollar. At the same time, the Hong Kong Stock Exchange will launch Asia's first virtual asset ETF products and allocate 50 million Hong Kong dollars to support the Hong Kong Web 3.0 ecosystem. From June 1, Hong Kong has officially become the first region in the world to regulate and license virtual asset trading platforms. On April 11, 2023, Hong Kong Chief Executive John Lee attended the inauguration ceremony of the Hong Kong Web 3.0 Association and delivered a speech, clearly conveying Hong Kong's determination to develop Web 3.0 and hoping that industry associations can provide services for the ecosystem development of Web 3.0.
Here is the English translation of the text, with the specified terms translated as requested:In 2024, Hong Kong's investment in Web 3.0 in terms of policies, corporate support, and talent cultivation is increasing. On January 4, 2024, the "New Opportunities for Digital Economy Development Summit" was successfully held at the Hong Kong Convention and Exhibition Centre, and the Hong Kong Web 3.0 Standardization Association (W3SA-HK) was established. The aim is to establish industry consensus, promote technological innovation, regulate the industry ecosystem, support government decision-making, and expand Hong Kong's international influence and discourse power in the Web 3.0 field. On May 30, 2024, Cyberport announced the establishment of the "Web 3.0 Investment Circle" under the "Cyberport Investment Network", with the aim of establishing a dedicated investor network in the Web3.0 field to promote investment in Web 3.0 projects. In October, Cyberport and Silicon Valley venture capital firm Draper Dragon jointly established the "Cyberport Draper Dragon Web 3.0 Accelerator" to actively promote the startup ecosystem of Hong Kong's Web 3.0. The Hong Kong Web3 and Virtual Assets Development Subcommittee proposed to increase investment in Cyberport and the Hong Kong Science Park, and by December, Hong Kong had nearly 300 Web 3.0-related companies.
On the second anniversary of Hong Kong's new crypto policies, Chief Executive of the Hong Kong SAR, John Lee, announced the 2024 Policy Address, which focused on increasing the development of "new productivity", establishing a HK$10 billion "Innovation and Technology Industry Guiding Fund"; optimizing the "Innovation and Technology Venture Fund"; and allocating HK$180 million to launch the "Innovation and Technology Accelerator Pilot Scheme" to match market funds and attract professional startup service organizations from home and abroad to set up in Hong Kong, proposing more specific measures to consolidate its position as a financial center and attract international high-end talents.
Web3Labs, a leading incubator focused on the Web 3.0 field, based on the government's announcement, is committed to building a global entrepreneurial hub for the Web 3.0 industry, allocating $10 million to provide full-ecosystem services and hosting online and offline events. On November 11, Web3Labs set up a brand-new offline Web 3.0 industry base - the Web3Labs HK Center in Causeway Bay, Hong Kong, leveraging Hong Kong's unique geographical location, financial advantages and open business environment to apply Web 3.0 technology to a wider range of fields, providing support and assistance to more entrepreneurs, and promoting the industry's more robust development. Web3Labs also officially announced joint "acceleration programs" with DFINITY Foundation, KuCoin Labs, TON and other institutions in 2024, providing underlying technology and financial support for the development of the industry ecosystem.
On November 27, the Hong Kong Legislative Council's Web3 and Virtual Assets Development Subcommittee publicly invited opinions from all sectors on the development of Web 3.0 and virtual assets, with a focus on virtual asset trading-related licenses and sandbox regulations, as well as the development of the Web3 ecosystem.
International Web 3.0 Events Boost Hong Kong's Industry Ecosystem
The Web 3.0 trend has swept through Hong Kong, and various large-scale international events have also landed in Hong Kong, providing a platform for industry professionals to exchange and cooperate, and also focusing the world's attention on Hong Kong. Each major event has brought a wealth of innovative ideas and collaboration opportunities.
On April 6, 2024, the "2024 Hong Kong Web3 Carnival" was held at the Hong Kong Convention and Exhibition Centre. As a major event in the cryptocurrency field, the three-day carnival attracted 30,000 participants and featured over 150 sub-events. The event was star-studded, with the presence of Hong Kong Financial Secretary Chan Mo-po, Legislative Council member Yau Tat-kwan, the Innovation, Technology and Industry Bureau, the Hong Kong Trade Development Council, Cyberport, the Hong Kong Monetary Authority, and many other prominent guests, as well as numerous well-known Web 3.0 practitioners. This event has become the annual flagship event for Hong Kong's Web 3.0. During the event, MetaEra, as an important partner, hosted a series of activities such as the Hong Kong Crypto Finance Forum and the Hong Kong Web 3.0 Ecosystem Welcome Reception, connecting Hong Kong's well-known Web 3.0 institutions and guests while providing rich event content.
On May 9 and 10, 2024, the Bitcoin Asia Summit 2024 grandly opened at the Kai Tak Cruise Terminal in Hong Kong. The Bitcoin Summit has always been held in the United States, and its first Asian edition being hosted in Hong Kong demonstrates Hong Kong's important position in Web 3.0 and its determination and courage to build Hong Kong into a global cryptocurrency center.
In November 2024, the one-week FinTech event - Hong Kong FinTech Week - was held at the Asia World-Expo, attracting over 100 economies and more than 30,000 participants. The forum topics focused on artificial intelligence, blockchain and digital assets, and financial innovation. It is worth noting that the proportion of regulators and traditional financial institutions among the participants and speakers has increased, and the collision between tradition and innovation has provided a new direction for the development of Web 3.0 in Hong Kong.
The Impact of Web 3.0 Development on Innovation in Hong Kong's Financial Landscape
On February 8, 2024, the Hong Kong government launched a public consultation on the legislative proposal to establish a licensing regime for virtual asset over-the-counter (OTC) trading service providers. This means that the virtual currency OTC in Hong Kong will usher in a compliant era. After all, the collapse of JPEX in 2023 was closely related to the virtual currency OTC service provider Cryptopay, and the Hong Kong government hopes to provide users with more protection and remedies through effective regulation and clear industry standards.
On April 30, 2024, six virtual asset spot ETFs were officially listed on the Hong Kong Stock Exchange, including Bitcoin and Ethereum spot ETFs from Huaxia Fund (Hong Kong), Bosera International, and Harvest International. These six ETFs differ in terms of product fees, trading, issuance, and virtual asset platforms. The listing day was seen as a historic moment for Hong Kong's capital market, as the launch of the Ethereum spot ETF was a full three months earlier than in the United States.
Entering the second half of 2024, the strong support for Cryptocurrencies from the incoming US President Trump ignited market enthusiasm, leading to a powerful growth wave in the Cryptocurrency market, breaking through the $100,000 mark on December 5th and setting a new historical record. Hong Kong's virtual asset spot ETFs also hit new highs, especially the Bitcoin ETF launched by Nanjing Nanfang Dongying, a subsidiary of Nanjing Nanfang Fund, which had a cumulative year-to-date gain of 87.88% as of November 12th.
At the same time, Cryptocurrency concept stocks also soared, and as Bitcoin broke through the $100,000 mark, Boyaa Interactive (00434.HK), Xiongʼan Technology (08267.HK), and Meitu (01357.HK) rose 22.49%, 14%, and 6.29% respectively. Affected by global economic uncertainties and investor confidence, Cryptocurrency concept stocks have seen high volatility, but the overall potential is huge, and it is believed that there will be stronger upward momentum in the future.
In the hedge fund, private equity, and some family office sectors, Hong Kong plans to exempt investment returns in Cryptocurrencies and other alternative assets from taxation, in order to enhance Hong Kong's attractiveness as a wealth management center.
Here is the English translation of the text, with the specified terms retained and not translated: On November 25, Hong Kong's digital bank ZA Bank launched a virtual asset trading function in its App for retail users, becoming the first bank in Asia to provide cryptocurrency trading services to retail users. At the same time, HashKey Exchange, Hong Kong's largest licensed virtual asset exchange, announced the launch of HashKey Pro, supporting API trading, block trading services, and enterprise-level account structure and permission management, providing user asset insurance and trading matching engine for institutional investors. The cooperation between ZA Bank and HashKey Exchange represents a new trend of collaboration between the traditional banking system and the digital currency ecosystem, providing stronger competitive advantages for the development of the Web 3.0 ecosystem in Hong Kong. On December 12, HashKey Exchange announced that its asset size has reached a historic high of HK$10 billion for the first time, and its cumulative trading volume has reached HK$580 billion as of 2024. The US Ignites the Fire of Hong Kong's Web 3.0, Burning Brighter and Brighter At this new historical juncture, Trump announced the Bitcoin strategic reserve plan in a high-profile manner, adding further momentum to Bitcoin's development. While other parts of the world are responding to the US and planning to include Bitcoin in their national strategic reserves, Hong Kong has also shown a friendly attitude: at the Hong Kong Legislative Council meeting on December 11, legislator Ng Chau-pei suggested to the Acting Secretary for Financial Services and the Treasury, Chan Ho-lim, that the government consider including digital assets and cryptocurrencies in the fiscal reserves and use the Exchange Fund to continuously purchase and hold them in the long term. Chan Ho-lim responded mildly, indicating that cryptocurrencies are likely to be included in the fiscal reserves. Pioneering Figures Ride the Waves, Driving the Development of Hong Kong's Ecosystem The rapid and healthy development of Hong Kong's Web 3.0 cannot be separated from visionary and courageous leaders and practitioners. They are keenly aware of market trends, grasp policy opportunities, and dare to be the first movers. In October 2024, on the second anniversary of Hong Kong's new crypto policies, MetaEra launched the "Hong Kong Zone" and a series of interviews with influential figures who have made outstanding contributions and significant impact in promoting the development of Hong Kong's Web 3.0. Through these interviews, they conveyed their development concepts, policy suggestions, and construction directions to the public interested in the development of Hong Kong's Web 3.0. Here are some of the representative figures' summaries and views on the development of Hong Kong's Web 3.0: "In terms of virtual asset regulation, Hong Kong implements a strict licensing system to protect investors and increase market transparency. The government encourages asset management companies to invest in virtual assets, while strengthening risk management and compliance procedures to ensure the long-term healthy development of the market. In addition, the government is comprehensively promoting innovative financial services, supporting the development of virtual banks and online insurance, using big data and artificial intelligence to improve the diversity and quality of financial services, thereby attracting more international investment." - Hong Kong Legislative Council member Ng Chau-pei "In this era of rapid technological development, Hong Kong's Web 3.0 ecosystem is facing unprecedented opportunities and challenges. As a global financial center, Hong Kong is at the forefront of the Web 3.0 revolution. I hope we can seize this historical opportunity, through innovation and cooperation, to build a more open and inclusive digital economic ecosystem." - Hong Kong Legislative Council member Yiu Tak-kee "In the next five years, Hong Kong's achievements in the Web 3.0 field will depend on the development trend of the entire industry. From a macro perspective, Hong Kong's position in Web 3.0 is expected to surpass its position in Web 2.0, and even surpass its position as a traditional financial center. Leveraging its comprehensive advantages in talent, capital, information, and industrial chain resources, Hong Kong has shown stronger competitiveness than regions like Singapore and Dubai in key tracks such as Web 3.0 finance, DePIN, and RWA." - Member of the Hong Kong Web 3.0 Task Force, Cyberport Director, and Founder of Nano Labs, Kong Jianping "We are pleased to see Hong Kong's positive attitude towards the development of the Web 3.0 industry. As one of the world's leading financial centers, Hong Kong has the technical infrastructure and professional talent needed to become a global Web 3.0 hub. Hong Kong's investment in advancing the Web 3.0 regulatory framework, such as the HKMA's stablecoin project, demonstrates its balanced approach to innovation and compliance. We believe Hong Kong has tremendous potential to play a key role in shaping the future of Web 3.0 and the open metaverse, as well as driving digital property rights." - Co-founder and Executive Chairman of Animoca Brands, Yat Siu "The main theme for Hong Kong in the next ten years is integration. We will actively build a more open, innovative, and sound financial market under the principles of 'no regulation, no finance', 'long-termism', and 'licensing first'." - Former CEO of HashKey Exchange, Weng Xiaoqi "Under the development trend of Web 3.0, Hong Kong dares to become the leader of the innovation wave. In the future, Hong Kong will develop into the core hub of the global Web 3.0 economic wave." - Executive Director and CEO of SINOHOPE, Du Jun "As a gateway between the East and West, Hong Kong will further expand the potential of stablecoins in the Asian market, meeting the growing demand for cross-border trade and payments. Stablecoins can eliminate frictions in global transactions by synchronizing information and capital flows. RD Technologies is building a compliant and stable digital currency to provide speed and cost advantages for enterprise cross-border transactions." - CEO of Circle Technology, Liu Yu "As a global hub of finance and technology, Hong Kong has all the conditions to lead Web 3.0 innovation. I look forward to working with different stakeholders in the context of Hong Kong's Web 3.0 development to jointly promote the prosperity of the Web 3.0 ecosystem." - CEO of Web3Labs, Caspar Wong With policy direction, ecosystem guarantee, financial innovation, and pioneering figures, the fire of Web 3.0 that was ignited in Hong Kong two years ago is burning brighter and brighter, gradually becoming a raging fire. Alongside Hong Kong's growth, MetaEra has also reached a new historical starting point with an astonishing 10-fold business growth in 2024. As they say, whoever has the discourse power can become the rule-maker. In the days to come, as a Web 3.0 information platform, MetaEra will help Hong Kong stand at the center of the Web 3.0 stage. In the spotlight, we are all the pioneers of the times. Disclaimer: As a blockchain information platform, the articles published on this site only represent the personal views of the authors and guests, and are not related to the stance of Web3Caff. The information in the articles is for reference only and does not constitute any investment advice or offer, and please abide by the relevant laws and regulations of your country or region.Welcome to join the official community of Web3Caff: X(Twitter) account | WeChat reader group | WeChat public account | Telegram subscription group | Telegram discussion group
