Hong Kong Will Continue To Advance With Web3 Despite Crypto Market Fluctuations, According To Hong Kong Finance Minister

JAKARTA - Hong Kong's Finance Minister, Paul Chan, stated that it is currently a "fit time" for Hong Kong to push for Web3 development, despite crypto market fluctuations. In a post blog on April 9, Chan explained that one of the three main directions proposed in the city budget was for further development and application of Web3.

Chan wrote that for "Web3 can continue to take innovative development paths", Hong Kong will "adopt strategies that emphasize 'precise regulations' and 'encourage development'. Chan also stated that the region plans to focus on financial security, prevent systemic risks, and prioritize education, investor protection, and anti-money laundering measures.

In October last year, the Hong Kong government raised the idea of introducing a law to regulate cryptocurrencies. On February 20 this year, the Hong Kong Securities and Futures Authority (SFC), a local securities regulator, released a proposal for the crypto exchange regime that will take effect in June.

The crypto industry has experienced a fairly severe bear market and faces challenges with the failure to exchange and constant surveillance of regulators. However, according to Chan, the industry only underwent the same process as the Internet in the early 2000s, where after a "bubble erupted", market participants became calmer.

"After the wave of speculation recedes, the players who are still strong will focus more on competing in technological innovations, practical applications, and value creation, as well as contributing to improving the quality of the real economy," Chan wrote.

"At the next stage, market participants need to develop a deeper blockchain technology, so characteristics and benefits of transparency, efficiency, security, removal of intermediaries, de-platformization, and low cost can be applied in broader scenarios and can solve more existing problems."

Hong Kong's approach to crypto regulation is very different from the United States, which adopts a tougher approach that has led to speculation that the crypto industry's "gravity center" will switch to Hong Kong.

The crypto exchange Gate.io has announced its plans to launch a presence in Hong Kong following a 50 million Hong Kong dollar injection from the local government in the 2023-24 budget.

According to Christian Hui's speech, Secretary of Financial and Treasury Services in Hong Kong on March 20, Hong Kong has attracted "attracts" from various crypto companies around the world since October 2022.

"The path of innovation and technological change has never gone smoothly," Chan said at his latest post.

"Although the direction of development has been determined, the actual path must be carried out step by step; just diligently trying we can find new solutions and new ways out," he added, quoted by Cointelegraph.