Johnny Ng Kit-Chong, a member of the Hong Kong Legislative Council, has announced that the global industry is being consulted to provide input on policy recommendations and discussions regarding the future of Web3 and the development of the virtual assets industry. The Legislative Council has established a subcommittee dedicated to promoting the growth of Web3 and virtual assets in Hong Kong. The proposal will be thoroughly examined, summarized, and presented to the government through the Legislative Council platform, with the intention of shaping Hong Kong’s policy and regulatory landscape and positioning it as a global center for Web3 innovation.
Hong Kong’s Legislative Council is actively seeking feedback on various crucial aspects of Web3 policy development. This includes finding the right balance between technical, legal, and regulatory frameworks to create a harmonious environment that supports both the technical and legal aspects of Web3, while also ensuring robust and transparent regulations. The Council is also interested in input on enhancing international cooperation to strengthen Hong Kong’s position as a globally connected Web3 hub. This involves exploring the convergence of artificial intelligence and Web3 technology to enhance AI regulation.
Furthermore, the Council aims to formulate policies that support the healthy growth of Decentralized Autonomous Organizations (DAOs) and develop strategies to attract and nurture talent in Web3 technology and financial innovation. Alongside Web3 policy, the Legislative Council is focusing on the virtual asset industry and seeking measures to facilitate its expansion in Hong Kong. This includes enhancing investor and consumer protection, boosting market confidence, and safeguarding virtual asset investors and consumers.
The Council also plans to assess the potential benefits and risks of stablecoins and establish regulatory frameworks that strike a balance between financial stability and innovation. It recognizes the increasing demand for professional custody services for virtual assets and intends to develop corresponding regulatory measures to meet this demand.
In July 2023, the Hong Kong government formed a task force consisting of 15 industry participants and 11 key government officials to oversee the development of Web3 and ethically promote its growth. However, the number of crypto exchanges applying for operational licenses in Hong Kong has been declining. On May 13, crypto exchanges IBTCEX and QuanXLab withdrew their applications, which were initially submitted in February 2024.