- The Hong Kong government captured Web3 in its 2023/2024 budget.
- The government plans to allocate $50 million to expedite Web3 development.
- Hong Kong regulator initiated a consultation process for VASPs seeking a license.
In a recently published budget statement, the Hong Kong government expressed strong interest in the third-generation Internet industry, Web3, aiming to seize the opportunity to spearhead innovation and development.
The budget is for the 2023/2024 fiscal year, and the Hong Kong government noted that it would allocate $50 million to expedite Web3 ecosystem development by organizing major international seminars. The budget statement aims to enable the industry and enterprises to grasp frontier development better, promote cross-sectoral business cooperation, and arrange a wide array of workshops for young people.
Concerning virtual assets (VA), the government said it would maintain the policy statements released last October. According to the official report, the next step would be to establish and lead a task force on VA development, with members from relevant policy bureaux, financial regulators, and market participants, to provide recommendations.
On Monday, Hong Kong’s Securities and Futures Commission (SFC) initiated a consultation process for Virtual Asset Service Providers (VASP) seeking a license to provide trading services. The regulator is also collecting input on whether licensed platforms should serve retail investors and under what investor protection measures.
According to the notice, crypto trading platforms planning to apply for a license must begin reviewing and revising their systems and controls to prepare for the new regime. It added:
Those that do not plan to apply for a license should start preparing for an orderly closure of their business in Hong Kong.
Under the proposed measures, it will be up to operators to do due diligence on tokens and monitor them, including assessing the regulatory status of the asset in each jurisdiction in which the operator provides trading services.