Article Author: Lesean, MetaEra

On October 31, 2022, an online AMA titled "The Tide Rises in Hong Kong: Interpretation of Hong Kong's Major Crypto Policy" was launched on Twitter Space. This one-hour live broadcast gathered many heavyweight figures from the Chinese blockchain community, with hundreds of thousands pouring into the live room, resembling a carnival, as if shouting for the departure of a great ship.

At that time, the Hong Kong SAR government had just released the "Policy Declaration on the Development of Virtual Assets in Hong Kong," in which the government clarified its policy stance and guidelines: it would cooperate in legal and regulatory systems to provide a conducive environment.

In the blink of an eye, two years have passed. Web 3.0 in Hong Kong has begun to develop at an unstoppable pace from what was once a spark. That live broadcast with hundreds of thousands of viewers was the starting point of MetaEra's dream and also our original intention to stay in Hong Kong. Since its establishment, MetaEra has clearly positioned itself as a "globally leading media based in Hong Kong," with influence radiating across Asia and even globally.

In early December 2024, Kong Jianping, director of Hong Kong Cyberport Management Company and chairman of Nano Labs, shared at a forum: "First, there was Hong Kong's positive attitude, and then the Trump administration's development of digital currency, which led to Bitcoin's price quickly breaking through $100,000. I have long been optimistic about Hong Kong's development in the digital crypto field and even the entire Web 3.0 sector; Hong Kong may surpass New York to become the world's financial center."

Such views are not unfounded. Looking at the development of Web 3.0 in Hong Kong in 2024, it is not only building a more stable and convenient market environment but also leveraging its long-standing advantages as a financial center.

Orderly Compliance, Steady Progress

Unlike other regions, Hong Kong's advancement of Web 3.0 is orderly and compliant. To avoid reckless growth, while providing freedom, it focuses on legal updates, industry regulation, issuing licenses, and promoting stablecoins. Especially as an established financial center, Hong Kong's strict regulations and transparent standards for financial licenses and Virtual Asset Service Provider (VASP) licenses provide a safer way for relevant clients. On June 1, 2023, the Hong Kong government officially opened the application for VASP licenses and required virtual asset service providers to submit their license applications by February 29, 2024. As of December 18, 2024, there are seven licensed Virtual Asset Trading Platforms (VATP) in Hong Kong, including OSL Exchange, HashKey Exchange, HKVAX, Cloud Account Greater Bay Area Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset Trading Group, and Thousand Whales Technology.

Stablecoins, as a type of virtual asset aimed at maintaining a relatively stable value against certain assets (usually currencies), can further stimulate the interconnection between Hong Kong's traditional finance and virtual asset markets. In January 2024, to further promote the legislative process of the stablecoin regulatory framework, the Hong Kong Monetary Authority (HKMA) released a consultation document proposing more detailed regulatory measures and, for the first time, clearly defined the concept of Fiat-Referenced Stablecoins (FRS); on March 12, 2024, the HKMA officially launched a regulatory sandbox for Hong Kong dollar stablecoins, providing an effective channel for the HKMA to exchange opinions on proposed regulatory systems with the industry; in the same month, to support the development of Hong Kong's tokenization market, the HKMA initiated a new wholesale Central Bank Digital Currency (wCBDC) sandbox project called Ensemble. This sandbox positions Hong Kong ahead of most other regions in stablecoin legislation.

In July 2024, the HKMA and the Financial Services and the Treasury Bureau released a consultation results report on the legislative proposal for implementing a regulatory system for Hong Kong stablecoin issuers, where the HKMA first clarified that tokenized forms of high-quality and highly liquid assets can be accepted as reserve assets for issuers. On July 18, the HKMA released the list of participants in the stablecoin issuer "sandbox," with the first batch of selected companies including Standard Chartered Bank in collaboration with Animoca and Yuan Coin Innovation Technology, Hong Kong Telecom, and JD Coin Chain Technology.

On December 6, the Hong Kong government published the "Stablecoin Bill" to introduce a regulatory system for fiat stablecoin issuers in Hong Kong, which was read for the first time on December 18. The bill aims to improve the regulatory framework for virtual asset activities to address the potential risks that fiat stablecoins pose to financial stability, ensure sufficient protection for users, and leverage the benefits that virtual assets and their related technologies can bring, further consolidating Hong Kong's position as a global center for stablecoin development and regulation.

In terms of Real World Assets (RWA), the HKMA issued a circular on "Sales and Distribution of Tokenized Products" in February this year to strengthen the management of institutions launching tokenized products; in May, the Hong Kong Securities and Futures Commission indicated that RWA investments might be open to retail investors to attract more funds and fintech talent to Hong Kong. In August, Ant Group announced a successful completion of the first domestic financing based on the tokenization of new energy physical assets (RWA) in Hong Kong, with a financing amount of approximately 100 million RMB. This innovative transaction was selected as one of the first RWA tokenization cases in the HKMA's Ensemble project sandbox. On October 28, during Hong Kong FinTech Week, Ant Group publicly stated its commitment to RWA business in Hong Kong, launching the "Two Chains, One Bridge" platform.

On August 28, 2024, the HKMA officially launched the "Ensemble" sandbox program, which will utilize experimental tokenized currencies to facilitate interbank settlements and focus on the study of tokenized asset trading, marking the Hong Kong government's forward-looking layout in the field of tokenized assets and demonstrating its determination to become a global center for RWA tokenization.

Multiple Supports to Build the Ecosystem

As early as 2022, the Hong Kong government declared that as an international financial center, it would support the innovation and ecosystem of international virtual asset businesses. The government would take the lead in issuing non-fungible tokens (NFTs), promoting green bond tokenization, digital Hong Kong dollars, and other related pilot programs, while the Hong Kong Stock Exchange would launch Asia's first virtual asset ETF products, allocating HKD 50 million to support Hong Kong's Web 3.0 ecosystem. Starting from June 1, Hong Kong officially became the world's first region to regulate and license virtual asset trading platforms. On April 11, 2023, Hong Kong Chief Executive John Lee attended the establishment ceremony of the Hong Kong Web 3.0 Association and delivered a speech, clearly conveying Hong Kong's determination to develop Web 3.0 and hoping to provide services for the ecological development of Web 3.0 through industry associations and other organizations.

In 2024, Hong Kong's investment in Web 3.0 in terms of policy, corporate support, and talent cultivation has become increasingly significant. On January 4, 2024, the "New Opportunities for Digital Economy Development Summit" was successfully held at the Hong Kong Financial Hall, and the Hong Kong Web 3.0 Standardization Association (W3SA-HK) was established. This aims to establish industry consensus, promote technological innovation, standardize the industry ecosystem, support government decision-making, and expand Hong Kong's international influence and voice in the Web 3.0 field. On May 30, 2024, Cyberport announced the establishment of the "Web 3.0 Investment Circle" under the "Cyberport Investment Network," aiming to create a dedicated investor network in the Web 3.0 field to promote investments related to Web 3.0 projects. In October, Cyberport and Silicon Valley venture capital Draper Dragon jointly established the Web 3.0 accelerator "Hong Kong Cyberport Draper Dragon Web 3.0 Accelerator" to actively promote Hong Kong's Web 3.0 entrepreneurial ecosystem. The Hong Kong Web3 and Virtual Asset Development Subcommittee proposed increasing investment in Hong Kong Cyberport and Hong Kong Science Park. By December, Hong Kong had nearly 300 Web 3.0-related companies.

On the second anniversary of Hong Kong's new crypto policy, Hong Kong Chief Executive John Lee announced the 2024 Policy Address, which highlighted the need to increase the development of "new quality productivity," establish a HKD 10 billion "Innovation and Technology Industry Guidance Fund"; optimize the "Innovation and Technology Venture Fund"; allocate HKD 180 million to launch the "Innovation and Technology Accelerator Pilot Program" to match market funds, attracting domestic and foreign professional startup service agencies to settle in Hong Kong, while proposing more specific measures to consolidate its position as a financial center and attract international high-end talent.

Focusing on the Web 3.0 field, the leading incubator Web3Labs is working to create a global entrepreneurial highland for the Web 3.0 industry based on the government's declaration, allocating USD 10 million to provide full ecological services and hosting online and offline events. On November 11, Web3Labs established a new offline Web 3.0 industry base—Web3Labs HK Center in Causeway Bay, Hong Kong. Leveraging Hong Kong's unique geographical location, financial advantages, and open business environment, it aims to apply Web 3.0 technology to a broader range of fields, providing support and assistance to more entrepreneurs and promoting the steady advancement of the entire industry. In 2024, Web3Labs also announced joint "acceleration plans" with institutions such as the DFINITY Foundation, KuCoin Labs, and TON, bringing underlying technology and funding support for the industry's ecological development.

On November 27, the Hong Kong Legislative Council's Web3 and Virtual Asset Development Subcommittee publicly invited all sectors to submit opinions on Web 3.0 and virtual asset development, aiming to further promote the development of Hong Kong's Web 3.0 and virtual asset industry, focusing mainly on licensing and sandbox regulations related to virtual asset trading and the development of the Web3 ecosystem.

International Web 3.0 Events Boost Hong Kong's Industry Ecosystem

The Web 3.0 wave has swept through Hong Kong, with various large international events landing in the city, providing a platform for industry professionals to communicate and collaborate, while also drawing the world's attention to Hong Kong. Each major event brings a wealth of innovative ideas and collaboration opportunities.

On April 6, 2024, the "2024 Hong Kong Web3 Carnival" was held at the Hong Kong Convention and Exhibition Centre. As a major event in the cryptocurrency field, the three-day carnival attracted 30,000 attendees and featured over 150 sub-events. The event was star-studded, with significant guests including Hong Kong's Financial Secretary Paul Chan, Legislative Council member Kenneth Lau, representatives from the Innovation and Technology Bureau, Hong Kong Trade Development Council, Cyberport, HKMA, and many renowned Web 3.0 practitioners sharing insights. This event has become the annual highlight of Hong Kong's Web 3.0 scene. During the event, MetaEra, as an important partner, hosted the Hong Kong Crypto Finance Forum, the Hong Kong Web 3.0 Ecosystem Welcome Reception, and other activities, linking well-known institutions and guests in Hong Kong's Web 3.0 space while providing rich event content.

On May 9 and 10, 2024, the Bitcoin Asia Summit 2024 grandly opened at the Kai Tak Cruise Terminal in Hong Kong. Historically, Bitcoin summits have been held in the United States, and this was the first time it was held in Asia, underscoring Hong Kong's important position in Web 3.0 and its determination to become a global cryptocurrency center.

In November 2024, the week-long financial technology event—Hong Kong FinTech Week—was held at AsiaWorld-Expo, attracting over 100 economies and more than 30,000 attendees. The forum focused on themes such as artificial intelligence, blockchain, digital assets, and financial innovation. Notably, this time, the proportion of participants and speakers from regulatory and traditional financial institutions increased, and the collision between tradition and innovation provided new directions for the development of Web 3.0 in Hong Kong.

The Development of Web 3.0's Innovation and Impact on Hong Kong's Financial Landscape

On February 8, 2024, the Hong Kong government launched a public consultation on the legislative proposal for establishing a licensing system for virtual asset over-the-counter (OTC) service providers. This also signifies that virtual currency OTC in Hong Kong will usher in a compliant era. After all, the collapse of JPEX in 2023 was closely related to virtual currency OTC service providers, and the Hong Kong government hopes to provide more protection and remedial measures for users through effective regulation and clear industry standards.

On April 30, 2024, six virtual asset spot ETFs were officially listed on the Hong Kong Stock Exchange, including Bitcoin and Ethereum spot ETFs from Huaxia Fund (Hong Kong), Bosera International, and Harvest Global Investments. These six ETFs exhibited certain differentiation in product fees, trading, issuance, and virtual asset platforms. The listing day was seen as a historic moment for Hong Kong's capital market, as the issuance of the Ethereum spot ETF was three months ahead of the United States.

Entering the second half of 2024, the high attention and support from the incoming U.S. President Trump for cryptocurrencies ignited market enthusiasm, leading to a strong growth wave in the cryptocurrency market, which broke through the $100,000 mark on December 5, setting a new historical record. The Hong Kong virtual asset spot ETFs also reached historical highs, particularly the Bitcoin ETF launched by Southern Fund's Hong Kong subsidiary, Southern Dongying, which recorded a cumulative increase of 87.88% by the close on November 12.

At the same time, cryptocurrency concept stocks also surged. As Bitcoin broke through the $100,000 mark, stocks like Boya Interactive (00434.HK), Xiong'an Technology (08267.HK), and Meitu Inc. (01357.HK) rose by 22.49%, 14%, and 6.29%, respectively. Influenced by global economic uncertainties and various factors affecting investor confidence, cryptocurrency concept stocks exhibited significant volatility, but the overall potential remains enormous, and stronger growth is expected in the future.

For hedge funds, private equity funds, and some family offices, Hong Kong plans to exempt investment income from cryptocurrencies and other alternative assets from taxation to enhance its attractiveness as a wealth management center.

On November 25, Hong Kong digital bank ZA Bank launched virtual asset trading features for retail users within its app, becoming the first bank in Asia to provide cryptocurrency trading services for retail users. At the same time, HashKey Exchange, Hong Kong's largest licensed virtual asset exchange, announced the launch of HashKey Pro, supporting API trading, block trading services, and enterprise-level account structure and permission management, providing user asset insurance and trading matching engines for institutional investors. The collaboration between ZA Bank and HashKey Exchange represents a new trend of cooperation between the traditional banking system and the digital currency ecosystem, providing a stronger competitive advantage for the development of the Web 3.0 ecosystem in Hong Kong.

On December 12, HashKey Exchange announced that its asset scale had reached a historic HKD 10 billion for the first time, and by 2024, its cumulative trading volume had reached HKD 580 billion.

The U.S. Ignites the Fire of Hong Kong's Web 3.0

At this new historical juncture, Trump announced a Bitcoin strategic reserve plan, adding momentum to Bitcoin's development. As other regions around the world responded to the U.S. and planned to include Bitcoin in their national strategic reserves, Hong Kong also expressed a friendly intention: on December 11, during a meeting of the Hong Kong Legislative Council, member Wu Jiezhuang suggested that the Hong Kong government consider including digital assets and cryptocurrencies in its fiscal reserves and use the foreign exchange fund to continuously purchase and hold them long-term. Chan Ho-lam, the acting Secretary for Financial Services and the Treasury, responded mildly, indicating that cryptocurrencies are likely to be included in fiscal reserves.

Visionary Figures Riding the Waves to Boost Hong Kong's Ecological Development

The rapid and healthy development of Web 3.0 in Hong Kong relies on visionary and bold leaders and practitioners who keenly sense market trends, grasp policy opportunities, stand at the forefront, and dare to lead. In October 2024, on the second anniversary of Hong Kong's new crypto policy, MetaEra launched the "Hong Kong Zone" and introduced a series of interviews with influential figures who have made outstanding contributions and significant impacts in promoting the development of Web 3.0 in Hong Kong, including government members, experts, scholars, investors, and entrepreneurs. This aims to convey their development concepts, policy recommendations, and construction directions to the public interested in Hong Kong's Web 3.0 development. Here, we also summarize some representative figures' insights and viewpoints on the development status of Hong Kong's Web 3.0 for readers.

"In terms of virtual asset regulation, Hong Kong implements a strict licensing system to protect investors and increase market transparency. The government encourages asset management companies to invest in virtual assets while strengthening risk management and compliance procedures to ensure the long-term healthy development of the market. Additionally, the government comprehensively promotes innovative financial services, supports the development of virtual banks and online insurance, and utilizes big data and artificial intelligence to enhance the diversity and quality of financial services, thereby attracting more international investments."

------ Hong Kong Legislative Council Member Wu Jiezhuang

"In this era of rapid technological development, Hong Kong's Web 3.0 ecosystem is facing unprecedented opportunities and challenges. As a global financial center, Hong Kong stands at the forefront of the Web 3.0 revolution. I hope we can seize this historical opportunity to create a more open and inclusive digital economy ecosystem through innovation and collaboration."

------ Hong Kong Legislative Council Member Kenneth Lau

"In the next five years, Hong Kong's achievements in the Web 3.0 field will depend on the overall development trend of the industry. From a macro perspective, Hong Kong's position in Web 3.0 is expected to surpass its position in Web 2.0 and even its status as a traditional financial center. With its comprehensive advantages in talent, capital, information, and industrial chain funding, Hong Kong has demonstrated stronger competitiveness in key tracks such as finance, DePIN, and RWA compared to regions like Singapore and Dubai."

------ Kong Jianping, member of the Hong Kong Web 3.0 Task Force, director of Cyberport, and founder of Nano Labs

"We are pleased to see Hong Kong's positive attitude toward developing the Web 3.0 industry. As one of the world's leading financial centers, Hong Kong has the necessary technological infrastructure and professional talent to become a global Web 3.0 hub. Hong Kong's investment in advancing the Web 3.0 regulatory framework, such as the HKMA's stablecoin project, demonstrates its balanced approach to innovation and compliance. We believe Hong Kong has great potential to play a key role in shaping the future of Web 3.0, the open metaverse, and promoting digital property rights."

------ Yat Siu, co-founder and executive chairman of Animoca Brands

"The main theme for Hong Kong in the next decade is integration. We will actively build a more open, innovative, and robust financial market under the principles of 'no regulation, no finance,' 'long-termism,' and 'license first.'"

------ Former CEO of HashKey Exchange, Wong Siu-ki

"Under the trend of Web 3.0 development, Hong Kong dares to be a leader in the wave of innovation. In the future, Hong Kong will develop into a core hub of the global Web 3.0 economic wave."

------ CEO of SINOHOPE Technology, Du Jun

"As a gateway between the East and West, Hong Kong will further expand the potential of stablecoins in the Asian market to meet the growing demand for cross-border trade and payment. Stablecoins can eliminate friction in global transactions by synchronizing information and capital flows. RD Technologies is creating a compliant and stable digital currency to provide speed and cost advantages for cross-border transactions for enterprises."

------ CEO of Yuan Coin Technology, Liu Yu

"Hong Kong, as a convergence point for global finance and technology, has all the conditions to lead Web 3.0 innovation. I look forward to collaborating with different stakeholders to promote the prosperous development of the Web 3.0 ecosystem against the backdrop of Hong Kong's Web 3.0 development."

------ CEO of Web3Labs, Caspar Wong

With policy direction, ecological support, financial innovation, and visionary figures leading the way, Hong Kong ignited the spark of Web 3.0 two years ago, and it is now growing stronger, gradually taking on the momentum of a prairie fire. In the days and nights that have accompanied Hong Kong's growth, MetaEra has also achieved an astonishing tenfold business growth, stepping into a new historical starting point in 2024. We often say that whoever holds the discourse power can become the rule-maker. In the days to come, MetaEra, as a Web 3.0 information platform, will surely help Hong Kong stand at the center of the Web 3.0 stage. Under the spotlight, we are all the wave riders of this moment.