Hong Kong Vows to Stay Open for Digital Assets

Hong Kong’s financial secretary, Paul Chan Mo-po, has reaffirmed the city’s commitment to becoming a leading crypto-friendly financial center. Speaking at Consensus 2025, he stated that the city remains open, stable, and dedicated to digital assets, emphasizing Hong Kong’s investment in Web3 infrastructure and talent development.

“As the Web3 ecosystem evolves, we will continue to build a vibrant market for digital assets,” Mo-po stated. “We are investing heavily in infrastructure and talent, ensuring that Hong Kong remains an innovation leader.”

Hong Kong: Asia’s Crypto Hub

His remarks highlight the city’s ongoing efforts to position itself as a regional crypto hub, distinguishing itself from mainland China’s strict anti-crypto stance. Mo-po cited Hong Kong’s Cyberport Web3 network, a government-backed innovation hub, which now hosts over 270 blockchain companies, including 120 new firms added in the past 17 months.

Additionally, Hong Kong has introduced crypto-friendly policies, including a proposal to exempt hedge funds, private equity, and family offices from crypto capital gains taxes—a move designed to attract institutional investment.

“The key to success,” Mo-po explained, “is maintaining an open and forward-thinking regulatory approach that balances innovation with responsible financial development.”

Regulation and Licensing Gains Momentum

Despite its ambitions, Hong Kong’s regulatory framework remains selective. Since launching its crypto licensing initiative last year, the Securities and Futures Commission (SFC) has issued just nine operational licenses for crypto firms.

The two most recent approvals, granted in January 2025, went to Hong Kong-based exchanges PantherTrade and YAX. The slow but methodical licensing approach suggests that regulators are carefully vetting applicants to ensure compliance and investor protection.

While the city aims to be crypto-friendly, Mo-po stressed the importance of balanced oversight. He noted that blockchain technology must integrate with artificial intelligence (AI) to unlock new opportunities in finance while addressing emerging risks.

AI and Blockchain: The Next Big Bet

Beyond crypto, AI’s growing role in finance was another focal point of Mo-po’s address. He described the intersection of blockchain and AI as one of the most exciting developments on the horizon.

“AI is constantly evolving and being applied to financial services, and its convergence with blockchain will bring new opportunities and challenges,” Mo-po said.

Hong Kong’s Financial Services and Treasury Bureau introduced a dual-track AI policy in October 2024, outlining a clear framework for AI integration in finance. Mo-po assured that government regulators are closely monitoring developments to create a transparent and adaptive regulatory system.