Can Hong Kong Become a New Global Web3 Hub? Challenges and Opportunities Coexist

Recently, Hong Kong held a grand Web3 carnival event, once again becoming the focus of global industry attention. The strong support from the government has turned Hong Kong into a new hot spot for the crypto industry, even surpassing Singapore. However, behind the excitement, the industry is truly concerned about the upcoming Web3 policies in Hong Kong and its regulatory direction in the Web3 field.

In recent months, positive signals regarding the development of Web3 in Hong Kong have frequently emerged, and the goal of becoming the "global Web3 center" seems to be within reach. As early as November 2022, Hong Kong released the "Policy Declaration on the Development of Virtual Assets in Hong Kong," after which hundreds of crypto companies began relocating back to Hong Kong from places like Singapore. Meanwhile, a large number of Web3 talents have also started to pour in from around the world. As an international financial center, Hong Kong already has a strong capital market foundation. Now that the elements of talent, capital, enterprises, and traffic are all in place, the development of Web3 in Hong Kong seems ready to go, with only the right timing needed. However, the future direction of Hong Kong's Web3 still depends on the upcoming regulatory new policies.

Under the current global trend, countries are gradually tightening their regulatory policies on the cryptocurrency industry, and strict regulatory measures are becoming the norm. Singapore, once hailed as the "global crypto center," has also begun to adjust its crypto policies to prevent financial risks after experiencing events such as the collapse of Three Arrows Capital and the bankruptcy of FTX. South Korea has similarly intensified regulatory efforts following the Luna crisis. Japan has just released a white paper on Web3 projects covering areas such as NFTs and DAOs. As for the United States, which has the greatest influence in the crypto field, although it has yet to establish a unified regulatory framework, recent lawsuits against large platforms like Binance indicate that it is ramping up enforcement efforts.

In this situation, Hong Kong has become the next habitat that many cryptocurrency companies are seeking. For those crypto companies looking for new opportunities, the upcoming new policies in Hong Kong have opened up more possibilities. Some hope to realize their Web3 dreams, while others may plan to design new financing solutions. At this time, Hong Kong is like a piece of fat meat, attracting attention from all sides. But how this "fat meat" will ultimately be distributed depends on how Hong Kong responds.

Hong Kong's return to the Web3 track can be described as "well-prepared". Although it missed the opportunity around 2019, allowing Singapore to seize a favorable position, after two years of industry reshuffling, Hong Kong's attitude has shifted from wait-and-see to proactive. As the Financial Secretary of the Hong Kong SAR, Paul Chan, said, after the sand settles, it is actually the best time for Web3 development. After the speculative frenzy subsides, the remaining participants will focus more on technological innovation, practical applications, and value creation, which is beneficial for promoting the healthy development of the entire industry.

However, Hong Kong's Web3 journey still faces many challenges. The primary task is to establish a stablecoin system as a bridge connecting the digital world with the real world. The Hong Kong Monetary Authority is studying relevant regulatory systems and plans to implement them in 2024. Meanwhile, starting from June 1, 2023, Hong Kong will allow all citizens to legally engage in cryptocurrency trading and launch a digital Hong Kong dollar based on Asian currencies. However, the specific regulatory plan for stablecoins has not yet been finalized, adding uncertainty to the prospects for Web3 development in Hong Kong.

The greatest uncertainty still comes from regulatory issues. The Hong Kong SAR government has stated that it will adopt a strategy that emphasizes "appropriate regulation" and "promoting development" to help the Web3 industry in Hong Kong develop healthily. This conveys Hong Kong's desire to seek a balance between innovation and stability. However, the specific implementation of "appropriate regulation" may be more complex and challenging, potentially even leading to regulatory gray areas. For Hong Kong to go further in the Web3 field, it needs to stay ahead in regulation while also acting cautiously.

For the entire industry, "letting things take their course" means greater risks, and investors may suffer losses; while overly strict regulation may stifle innovation and lead to the loss of businesses. How to achieve the best balance between regulation and development without undermining the innovative vitality of Web3 is the core issue facing the development of Web3 in Hong Kong, and it will also determine how long crypto enterprises can establish themselves in Hong Kong.

Under the trend of globalization, it is difficult for Hong Kong to be completely independent of the regulatory trends of other countries. The regulation of the crypto industry will be the result of global regulatory interactions, and it is unlikely that Hong Kong will become a regulatory haven. Companies hoping to find a more relaxed regulatory environment in Hong Kong may be disappointed. For Web3 to develop sustainably in Hong Kong and become an important part of its future development, a more subtle balance needs to be sought in the design of regulatory policies. This will test the wisdom and determination of the Hong Kong government.