Web3 Connect: Hong Kong and the World

• Rita Liu (CEO, RD Technologies)

• Gary Liu (Co-Founder & CEO, Terminal 3)

• Du Yu (General Manager, Wanxiang Blockchain Labs)

• Yam Ki Chan (Vice President, Asia Pacific, Circle)

• Dominic Maffei (Head of Digital Assets & Fintech, Hong Kong, Standard Chartered Bank)

• Thomas Zhu (Head of Digital Assets, Head of Family Office Business, China Asset Management (Hong Kong)

• Milton Lam (Project Lead of Stablecoin Animoca Brands)

Excerpts from the event:

In response to the changes in the regulatory landscape in Hong Kong and around the world, Cyberport organized the "Web3 Connect: Hong Kong and the World" event on September 7 at the CyberArena, bringing together industry leaders and visionaries from government, finance, technology as well as outstanding start-ups to discuss stablecoin policies and developments in different countries and regions. Among them, the speakers included representatives from the stablecoin issuer sandbox initiated by the Hong Kong Monetary Authority (HKMA). There were around 10,000 participants to attend the event physically and virtually. 

The Under Secretary for Financial Services and the Treasury Bureau (FSTB), Mr. Joseph Chan, delivered an opening speech, saying that Hong Kong has achieved many milestones after the HKSAR Government issued a policy statement on the development of Virtual Assets (VA) in Hong Kong in 2022, which sets out the Government's policy stance and approach towards developing a vibrant sector and ecosystem for VA in Hong Kong. These achievements are laying the groundwork for the next wave of opportunities in Hong Kong’s Web3.0 development.

As the host of the event, Chief Corporate Development Officer of Cyberport, Ms. Georgina Chu, shared in her welcome speech that Cyberport, as Hong Kong's flagship for digital technology and entrepreneurship, has been instrumental in supporting the development of Web3.0 companies. With a strategic investment from the HKSAR Government, Cyberport has initiated various programs - ranging from cultivating talent, promoting industry development and technological applications to deepening the public understanding of Web3.0 - to accelerate the growth of the Web3.0 industry. Since the establishment of the “Web3Hub@Cyberport”, it has attracted over 260 Web3.0 companies, from local Hong Kong, mainland China and 19 overseas countries, spanning across the areas of FinTech, Smart Living, Digital Entertainment and beyond.

Hon Duncan Chiu, Legislative Council Member of HKSAR (Technology and Innovation) and the President of the Hong Kong Information Technology Joint Council (HKITJC) made a keynote speech on behalf of one of the co-hosts: HKITJC, saying that he is glad to see many audiences despite an ad-hoc one-day postponement of the event due to Typhoon Yagi. Instead, they still get together to discuss the changes in the regulatory landscape in Hong Kong and across the world, which reflects their immense interests in the nascent industry.

The event invited famous speaker, Emily Parker (Writer, Former US State Department & Wall Street Journal, Ex-Executive Director of Global Strategy of CoinDesk), who is highly recognized as a writer and public speaker on digital, to deliver a keynote speech on regulatory landscape around the world and host a stablecoin-related panel discussion. Key points of Emily’s presentation on virtual asset regulatory trends as follows:

• “Crypto friendly” is not necessarily “Crypto-Easy”, as “Crypto-friendly” jurisdictions have some of the toughest requirements for sustainable development. For example, Hong Kong has comprehensive regulations with straight rules; Singapore is friendly to asset tokenization but not necessarily crypto. Japan is among the first countries to have comprehensive stablecoin regulations, but the bar is high. Korea has a powerful retail market, yet some grey areas remain. Crypto has also become an election issue in the U.S., while there are multiple Securities and Exchange Commission (SEC) cases in this space in the U.S..

• Hong Kong is on its path to becoming a digital assets hub, with comprehensive virtual asset regulations and licensing for retail trading on exchanges. The city is taking cautious steps with 98% cold storage requirement and strict rules on custody. Hong Kong is also proactive in Web3.0 development with new sandbox for stablecoin issuers and live ETFs for Bitcoin and Ether.

• Emily also gave detailed analysis on various jurisdictions. Singapore with regulatory clarity on tokenization. Ravi Menon, the former Managing Director of Monetary Authority of Singapore (MAS), previously mentioned “Cryptocurrencies have failed the test of digital money”. Japan has a clear, friendly and strict crypto regulation, and has clarified the legal status of Decentralized Autonomous Organizations (DAOs). On the tax side for crypto, rate can reach as high as 55%, which is also one of the reasons for it not to have launched Bitcoin spot ETF yet as it could provide unfair advantage to ETF issuers with lower tax rate, as compared to existing Web3.0 players.

Forest Bai, Co-founder of Foresight Ventures, also shared challenges and opportunities in building a global Web3.0 supply chain network in Hong Kong. He shared that Web3.0 is more international in nature and Hong Kong’s traditional positioning as a financial and import-export hub can also be leveraged in Web3.0, including the presence of globally top ranked universities, start-up support, well-funded local enterprises, an open and transparent regulatory environment, close connection with talents and supply chain with mainland China, convenience of visa arrangements for international visitors and more.

Nevertheless, a challenge is that as Hong Kong only started its Web3.0 journey two years ago, the city still needs to further catch up on having more local web3 companies, which could be facilitated by greater effort in welcoming talents globally, increase support of funding to web3 start-up companies, support to early-stage project teams and developers and encourage more Web3.0 use cases in daily lives.

For high-resolution photos, please download via this link.

HKSAR Government’s support and Cyberport’s initiatives in promoting the development of the Web3.0 ecosystem

• The HKSAR Government issued a policy statement on the development of virtual assets (VA) in Hong Kong in 2022 to set out the Government's policy stance and approach towards developing a vibrant sector and ecosystem for VA in Hong Kong.
  

• Since then, Hong Kong has achieved significant milestones, including the introduction of the licensing regime for VA exchanges in June last year; the listing of Asia’s first Spot Virtual Asset ETFs in Hong Kong in April this year; Earlier this year, the completion of public consultations on the regulatory frameworks for both over-the-counter trading of VA, and stablecoins.

• In March, Hong Kong took another important step by introducing a stablecoin sandbox to further refine the approaches. The HKMA has received inquiries from dozens of institutions. In July this year, HKMA announced the first batch of three participants admitted to the sandbox.

• The initiatives and regulatory advancements are laying the groundwork for the next wave of opportunities in Hong Kong’s Web3.0 development.

• As Hong Kong’s digital technology flagship and incubator for entrepreneurship, Cyberport was allocated HK$50 million in funding from the Government to accelerate the development of the Web3.0 ecosystem.

• Cyberport has been nurturing talent, promoting industry development and technological applications, and deepening the public understanding of Web3.0, thereby promoting the development of the Web3.0 ecosystem in Hong Kong.

• With the establishment of the “Web3Hub@Cyberport”, Cyberport now has over 260 Web3.0 companies in its community, from local Hong Kong, mainland China and 19 overseas countries, spanning across the areas of FinTech, Smart Living, Digital Entertainment and beyond.

• Among them are three unicorns including the blockchain gaming company Animoca Brands, the Asia’s digital asset financial services group HashKey and the blockchain cybersecurity company CertiK.

• As Hong Kong’s leading FinTech and Web3.0 hub, Cyberport is dedicated to fostering collaboration between startups, institutions and government departments through various pilot programmes. For example, Cyberport start-ups, EVIDENT and Linked Charge will participate in the HKMA’s new wholesale central bank digital currency (wCBDC) Project Ensemble Sandbox. As part of the programme's focus on Green and Sustainable Finance, they will collaborate on the tokenisation of Real World Assets (RWA) using blockchain technology to enhance transparency and efficiency in Green and Sustainable Finance. Two Cyberport start-ups (RD Technologies, Animoca Brands) also entered the HKMA stablecoin sandbox and another participant JINGDONG Coinlink Technology is a Cyberport Enterprise Network (CEN) partner; community member HashKey is one of the two licensed Virtual Asset Trading platforms in Hong Kong, which is also an issuer of virtual asset ETFs in Hong Kong.
  

• To build a thriving third-generation internet ecosystem, Cyberport has established the “Web3.0 Investors Circle” (W3IC) with an aim to create an exclusive network for investors in the Web3.0 domain to facilitate Web3.0-related investment. Cyberport also supported over 60 industry conferences and events, and the Web3 Living Lab at Cyberport, which showcases some latest innovative solutions in Web3.0, has welcomed over 15,000 visitors including government officials, corporates and Web3.0 companies from around the world.
  

• As technological innovation becomes mainstream, the world’s industries have entered peak digital transformation, and talent in innovation and technology are in-demand in local and global markets. As a flagship for innovation and technology cultivation in Hong Kong, Cyberport’s vision is to create a new economic driver for Hong Kong. Cyberport is committed to cultivating tech talent and entrepreneurs while fostering digital development and accelerating digital uptake in the public and private sectors.

• This year, the Cyberport University Partnership Programme (CUPP) focused on Web3.0 and entrepreneurial training trained over 40 students of 20 project teams from 11 local universities, with a bootcamp in the Silicon Valley.

• Technology is changing rapidly, as the development of artificial intelligence (AI) matures, it’s expected to bring huge potential and a wide range of applications.

• As a leading artificial intelligence hub in Hong Kong, Cyberport is fully committed to establishing Hong Kong's first large-scale AI Supercomputing Centre (AISC), with the first phase facility expected to start operating within this year.

• The Government allocated HK$3 billion in 2024 Budget for implantation of a three-year funding programme through Cyberport, including subsidising institutions and enterprises to utilise AISC, to advance AI ecosystem and industry development in Hong Kong in alignment with the national innovation and technology development strategy, development Hong Kong into an international innovation and technology hub.

• In the future, with the strong support of the Government, Cyberport will continue to make good use of its unique edges to provide a platform for communication, collaboration and sharing resources for all stakeholders, while promoting cross-sector cooperation with leading technology companies, Together, we can more effectively promote the development of the innovation and technology industry, including artificial intelligence and the third generation of the Internet, empowering innovation and technology and the digital economy.

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About Cyberport
Cyberport is Hong Kong’s digital technology flagship and incubator for entrepreneurship with over 2,000 members including over 900 onsite and over 1,100 offsite start-ups and technology companies. It is managed by Hong Kong Cyberport Management Company Limited, wholly owned by the Hong Kong SAR Government. With a vision to be the hub for digital technology, thereby creating a new economic driver for Hong Kong, Cyberport is committed to nurturing a vibrant tech ecosystem by cultivating talent, promoting entrepreneurship among youth, supporting start-ups, fostering industry development by promoting strategic collaboration with local and international partners, and integrating new and traditional economies by accelerating digital transformation in public and private sectors. For more information, please visit http://www.cyberport.hk.