Hong Kong Parliament Establishes Legislative Subcommittee on Cryptocurrencies
The new Subcommittee on Cryptocurrencies and Web3, chaired by Johnny Ng, will focus on improving cryptocurrency investor protection, possible uses and risks of stablecoins, and exploring regulatory measures for professional cryptoasset custody services.
According to ChainCatcher, Hong Kong’s Legislative Council recently established a subcommittee to address issues related to cryptocurrencies and Web3. The Hong Kong lawmaker said his office is gathering feedback on policies from the global Web3 industry.
On Saturday, Hong Kong lawmaker Johnny Ng reported that his team is gathering feedback on global policies for the Web3 industry, following the establishment of a cryptocurrency subcommittee under the Legislative Council.
This was announced in a post on X by Johnny Ng, in which he reported on the recent establishment of the subcommittee on Web3 and virtual asset development.
“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,” said Johnny Ng. “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.” He further commented.
Johnny Ng’s office will focus on researching policies for the integrated development of artificial intelligence (AI) and Web3, as well as regulatory recommendations for DAOs, according to his X post.
Notably, unlike mainland China’s heavy crackdown on cryptocurrency trading and mining, Hong Kong has rolled out the welcome mat for cryptocurrency companies, especially over the past year. As a point of reference, in June 2023, Hong Kong officially launched its cryptocurrency licensing regime for cryptocurrency trading platforms, allowing previously licensed exchanges to offer retail trading services.
Hong Kong Aims to Become Cryptographic Hot Spot
Hong Kong authorities have prioritized making the region lucrative for Web3 companies. After all, despite the financial risks associated with digital assets, the cryptocurrency market currently has a valuation of $2.26 trillion (approximately Rs. 1,88,68,265 crores).
From a Web3 policy perspective, the subcommittee is tasked with balancing the growth of Web3 within a regulatory framework. This newly formed body will also promote the synthetic intelligence (AI) sector.
Meanwhile, policy work around virtual assets will focus on investor and consumer protection, which could lead to increased market confidence.
Hong Kong Regulators Reaffirm Neutral Stance on Cryptocurrencies
n April, Hong Kong saw the launch of spot bitcoin and ethereum exchange-traded funds (ETFs) for the first time.
In the first quarter of this year, the combined average daily turnover of the three ETFs that debuted in Hong Kong was HK$51.3 million (approximately $6.5 million), according to HKEX data. In addition, the three cryptocurrency futures ETFs generated about $67.7 million in net inflows during the first quarter.
Separately, in July last year, the Hong Kong government formed a special working group consisting of 15 cryptocurrency industry participants and 11 key government officials. This, with the aim of overseeing the development of Web3 and focusing on “ethically promoting its growth”.
In addition, earlier this month, “Julia Leung,” executive director of the Hong Kong Securities and Futures Commission, noted that bitcoin has clearly demonstrated its staying power as an alternative asset in the country. However, Leung clarified in her speech that the regulator’s support for the Web3 ecosystem “should not be taken as an endorsement of digital assets.
The launch of Hong Kong’s exchange licensing regime was hampered last year when, despite existing regulations, an unauthorized cryptocurrency exchange called “JPEX” managed to defraud hundreds of investors out of $166 million before collapsing in September 2023. Since then, the country’s residents have become much more skeptical of cryptocurrency investments.
By Leonardo Perez