The Hong Kong government has established a web3 task force with the aim of providing recommendations for sustainable and responsible development of cryptocurrencies in the region. The task force, chaired by the Financial Secretary, consists of 15 non-official members from relevant market sectors, as well as key government officials and financial regulators. The initial term of the task force is set at two years, starting from July 1, according to an announcement made on Friday.
This task force is an extension of the government's policy statement on the development of virtual assets, which was issued in October 2022. The statement outlined Hong Kong's position and approach towards the virtual asset sector.
Hong Kong's Financial Secretary, Paul Chan, highlighted the potential of blockchain technology, which underpins web3, in terms of disintermediation, security, transparency, and low cost. He emphasized that this technology has the capacity to address various challenges faced in finance, trade, business operations, and even daily life.
Chan stated, "Based on a balance between appropriate regulation and promoting development, Hong Kong aims to take the lead in innovative exploration and development, create new application models, and attract top-notch companies and talent to build a thriving ecosystem."
The government's commitment to nurturing a web3 ecosystem and establishing a task force on virtual asset development was previously mentioned by Chan in his budget speech for 2023-2024, which was delivered in February. This was also echoed in a recent government study that expressed concerns about Hong Kong falling behind East Asia and Gulf countries in web3 development.
In line with its crypto ambitions, the Hong Kong Monetary Authority (HKMA), the banking regulator in the region, has been pressuring HSBC, Standard Chartered, and Bank of China to accept crypto exchanges as clients. These banks hold a special role as issuers of the city's currency.
Furthermore, Circle, the issuer of the USDC stablecoin, has shown interest in Hong Kong, with CEO Jeremy Allaire identifying "enormous demand for digital dollars" in the region.
Overall, the establishment of the web3 task force demonstrates Hong Kong's commitment to fostering innovation and development in the virtual asset sector, while maintaining a balance between regulation and growth. The government aims to position Hong Kong as a leading hub for web3 technologies, attracting top companies and talent, and creating a vibrant ecosystem in the process.