Hong Kong seeks global input on future of web3 and virtual assets

The Hong Kong Legislative Council is actively seeking feedback on several key aspects of Web3 policy making, including balancing technology, legal and regulatory frameworks.

Hong Kong Legislative Council member Wu Jiezhuang said that he is now soliciting opinions from the global industry to propose policy recommendations and special discussions on the future development direction of Web3 and the virtual asset industry.  

According to a post on the X social platform, the Legislative Council has established a Web3 and Virtual Asset Development Subcommittee to promote the development of Web3 and virtual assets in Hong Kong.

What Hong Kong is looking for

The proposal will be studied in detail, summarized, and submitted to the government through the Legislative Council platform. The initiative aims to shape Hong Kong's policy and regulatory landscape to position it as a global Web3 innovation hub.

The Hong Kong Legislative Council is actively seeking feedback on several key aspects of Web3 policy development, including balancing technical, legal and regulatory frameworks to create a cohesive environment that supports Web3 technical and legal aspects and ensures strong and clear regulation.

The Council is also interested in understanding feedback on strengthening international cooperation to consolidate Hong Kong's position as a globally connected Web3 hub. This includes exploring the convergence of AI and Web3 technologies to improve artificial intelligence (AI) regulation.

It also involves formulating policies to support the healthy development of decentralized autonomous organizations (DAOs), and formulating strategies to attract and cultivate innovative talents in Web3 technology and finance.

In addition to Web3 policies, the Legislative Council also focuses on the virtual asset industry and seeks to formulate measures to promote its development in Hong Kong. To achieve this goal, it explores ways to strengthen investor and consumer protection, boost market confidence, and protect virtual asset investors and consumers.

In addition, the Council plans to assess the potential benefits and risks of stablecoins and develop a regulatory framework that balances financial stability and innovation. It also addresses the growing demand for professional custody services for virtual assets and has developed corresponding regulatory measures to support this demand.

Hong Kong's View on the Industry

In July 2023, the Hong Kong government established a working group consisting of 15 industry players and 11 key government officials to oversee the development of Web3, with a focus on promoting its development in an ethical manner.

However, the number of cryptocurrency exchanges seeking operating licenses in Hong Kong is steadily decreasing. On May 13, cryptocurrency exchanges IBTCEX and QuanXLab withdrew their applications originally submitted in February 2024.