Hong Kong Legislative Council member Johnny NG Kit-Chong has said that opinions are now being sought from the global industry to propose policy recommendations and thematic discussions on the future direction of Web3 and virtual assets industry development. 

According to a post on the X social platform, the Legislative Council established a subcommittee on Web3 and virtual asset development 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. This initiative aims to shape Hong Kong’s policy and regulatory landscape, positioning it as a global hub for Web3 innovation.

The Hong Kong Legislative Council is actively seeking feedback on several critical aspects of Web3 policy development, including balancing technical, legal, and regulatory frameworks to create a cohesive environment that supports the technical and legal aspects of Web3, ensuring robust and clear regulations.

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

It also involves crafting policies to support the healthy development of Decentralized Autonomous Organizations (DAOs) and developing strategies to attract and nurture talent in Web3 technology and financial innovation.

In addition to the Web3 policy, the Legislative Council is also focusing on the virtual asset industry and looking to identify measures to facilitate its growth in Hong Kong. To achieve this, it explores ways to enhance investor and consumer protection, boost market confidence, and safeguard virtual asset investors and consumers.

Additionally, the Council plans to assess stablecoins’ potential benefits and risks and develop regulatory frameworks that balance financial stability with innovation. It also addresses the growing need for professional custody services for virtual assets and develops corresponding regulatory measures to support this demand.

Hong Kong’s take on the industry

In July 2023, the government of Hong Kong formed a task force comprising 15 industry participants and 11 key government officials to oversee the development of Web3 and focus on ethically promoting its growth.

However, the number of crypto exchanges seeking operational licenses in Hong Kong is steadily decreasing. On May 13, crypto exchanges IBTCEX and QuanXLab withdrew their applications, initially filed in February 2024.