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Hong Kong forms task force to promote Web3 development

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(Kitco News) - The government of Hong Kong has announced the formation of a new task force designed to promote Web3 development, citing the potential benefits that blockchain technology offers many industries as the world moves towards a more decentralized internet.

“The blockchain technology underpinning Web3 features characteristics in respect of disintermediation, security, transparency, and low cost,” said Paul Chan, Financial Secretary of Hong Kong. “It has the potential to solve many difficulties and pain points encountered in finance, trade, business operations and even day-to-day life.”

Web3 is the concept of a new iteration of the Internet that is built on a foundation of blockchain technology, artificial intelligence, and the Internet of Things (IoT) to offer a decentralized, permissionless and open-source user experience.

According to the press release, the role of the task force is to provide recommendations on “the sustainable and responsible development of Web3 in Hong Kong.” Chan has been selected to chair the new task force, which is comprised of 11 members from government agencies and 15 advisory members from business and industry sectors.

Included in the list of advisory members is Yat Sui, co-founder and chairman of Hong Kong-based software and investment giant Animoca Brands.

“The Task Force firmly establishes Hong Kong as the leading example of a mature and highly modernized economy that embraces the remarkable opportunities presented by Web3, blockchain, virtual assets, and the open metaverse,” Sui said in a statement released Monday. “I believe that the work of the Task Force will help to shape not only Hong Kong but also globally in the adoption of blockchain technologies, particularly in the areas of regulation, ecosystem building, industry development, and talent development.”

The launch of the task force is part of Hong Kong's effort to become a global hub for digital asset trading and the broader Web3 industry.

“Hong Kong is an international financial centre and a metropolis attaching importance to innovation and technology, and embracing the megatrend of Web3 development,” Chan said. “Premised on a balance between appropriate regulation and promoting development, Hong Kong seeks to lead and drive innovative exploration and development, create more new application models, and strives to draw together top-notch companies and talent in the arena to build a thriving ecosystem. With the Task Force bringing together leaders and professionals in the sectors involved, I believe their valuable advice will help Hong Kong develop into a Web3 hub.”

Chan has been a vocal advocate for Web3 in Hong Kong and announced an allocation of HK$50 million (US$6.37 million) to develop the city’s Web3 sector in his 2023 annual budget speech in February.

Hong Kong government pressures banks to onboard crypto exchanges

To help facilitate the expansion of its blockchain ecosystem, Hong Kong began allowing retail traders in the region to trade cryptocurrencies on June 1. Later in the month, HSBC Hong Kong enabled the trading of Bitcoin and Ether exchange-traded funds (ETFs) listed on Hong Kong's stock exchange.

Despite its comprehensive ban on cryptocurrencies, China has been welcoming of these developments, and has even sent liaisons and other officials to crypto gatherings in Hong Kong where they networked, swapped business cards, and in some instances, kept in contact with blockchain companies. This has been interpreted as a behind-the-scenes approval by the Chinese government.

Based on recent developments, China appears to be using the city as a testing ground for digital assets while keeping a tight grip on crypto-related activities on the mainland. As noted by Circle founder Jeremy Allaire in a recent interview, “Hong Kong clearly is looking to establish itself as a very significant center for digital assets markets and for stablecoins and we are paying very close attention to that. What’s happening in Hong Kong may be a proxy for ultimately how these markets grow in Greater China.”

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