The HK Government today issued a policy statement on the development of virtual assets in Hong Kong, setting out the Government's policy stance and approach to developing a vibrant virtual asset industry and ecosystem in Hong Kong. Covering four areas: vision and approach, regulation, pilot schemes and outlook, the Government said it is ready to embrace the future of finance and commerce, and to support the technological development and social and economic benefits behind virtual assets.
Hong Kong is playing its part again.
East Asia for Chinese teams has seen Singapore's starting expenses soar lately and there is no engineer bonus; there is no shortage of finance, only a dearth of entrepreneurs.
The Greater Bay Area, the highest concentration of businesspeople and engineers in China, is located next to Hong Kong and has a distinct advantage over Singapore.
The significance of the policy can be reflected in three aspects:
- Chinese entrepreneurs can now launch their businesses at a lower cost outside of Singapore thanks to the cryptocurrency industry;
- the collapse of Hong Kong has made the virtual asset industry look like a lifesaver
- Although domestic regulation may also step in, it is anticipated that Hong Kong's signal and growth will help restore some of China's voice.
However, we should also notice that the term "cryptocurrency" is avoided in the policy in favor of the term "virtual assets." The Declaration avoids the term "decentralization" and instead refers to distributed ledger technology (DLT). Only the following three types of assets will be considered virtual, i.e., NFT, tokenized assets (i.e., asset-backed tokens, asset-backed tokens), stablecoins, and digital Hong Kong dollars. Fungible tokens, security tokens, and other cryptocurrencies are not included in the definition of virtual assets (i.e., they will not be officially legalized). In conclusion, while Hong Kong's new policy is still largely conservative and careful, it does provide some room for future innovation, particularly in the field of security tokens.
Obviously, the policy problem continues to be the main issue. If the team is still primarily stationed in the Greater Bay Area, then legality is still a sword hanging over the team's heads. The entry of a Mainland team into Hong Kong does not mean that anything can be done, and the cost of starting a business in Hong Kong is not significantly less than in Singapore.