Hong Kong Legislative Council Forms Digital Asset Development and Web3 Subcommittee

June 24, 2024

Hong Kong is positioning itself as a leading hub for Web3 and virtual asset development with the recent establishment of a specialized subcommittee under its legislative council. This proactive step marks a significant stride in aligning Hong Kong’s regulatory framework with the rapid evolution of the global crypto landscape.

Johnny Ng, a prominent Hong Kong lawmaker, announced through an X post on Saturday that the Hong Kong Legislative Council has set up a Subcommittee on Web3 and Virtual Asset Development. This committee aims to gather policy feedback from the global Web3 industry to shape future regulations and strategies. Ng emphasized the committee’s focus on various critical aspects, including investor protection, financial stability, and regulatory measures for professional crypto custody services.

Hong Kong, known for its unique position as a financial hub distinct from mainland China’s stringent crypto policies, has been increasingly embracing the digital asset sector. Earlier this month, Hong Kong expelled all unlicensed crypto exchanges after strict on-site inspections, signaling a stricter stance on regulatory compliance. This move was followed by the launch of spot BTC and ETH ETFs in April, making Hong Kong Asia’s first to do so.

Ng’s office is actively soliciting feedback from global Web3 industry stakeholders to address several critical areas. These include balancing technology and legal frameworks, integrating artificial intelligence with Web3, and developing regulatory systems for DAOs. The goal is to ensure that Hong Kong remains at the forefront of technological and financial innovation while maintaining robust investor protections.

Alex Witt, General Partner at Verda Ventures, praised the initiative, noting, “Very smart to seek out input from industry. Informed regulation is a huge strategic advantage for jurisdictions attracting (Web3) business.” Alex also mentioned sending detailed thoughts on the nine topics outlined by Ng, highlighting the importance of collaborative regulatory development.

The Shib Daily has reached out to Ng and Witt for further comments and insights on this development and is awaiting their responses.

Hong Kong’s establishment of a subcommittee for Web3 marks a pivotal step in shaping the future of the digital asset industry. By inviting global input and focusing on comprehensive regulatory measures, Hong Kong is well-positioned to be the torch bearer in something new in the space. This integrated approach could serve as a decentralized model for other countries to maintain and regulate crypto effectively.

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