Hong Kong’s Legislative Council Debuts Web3 & Virtual Assets Subcommittee

In a progressive move to enhance its digital ecosystem, Hong Kong's Legislative Council has established a specialized subcommittee dedicated to Web3 and virtual assets. This initiative reflects Hong Kong's commitment to embracing technological advancements and promoting digital transformation.

Through this subcommittee, the Legislative Council intends to establish regulatory frameworks, facilitate innovation, and capitalize on Web3 and virtual assets to drive economic expansion and global competitiveness in the digital realm.

Subcommittee's Objectives and Initiatives

The subcommittee, spearheaded by Legislative Council member Wu Jiezhuang, aims to spur growth in these sectors. It seeks expert insights from the global industry to shape policy recommendations and future development strategies.

Key areas of focus include:

• Developing well-balanced regulatory frameworks for Web3 technologies
• Fostering international collaboration to establish Hong Kong as a global Web3 hub
• Integrating artificial intelligence with Web3 advancements
• Establishing robust policy frameworks for decentralized autonomous organizations (DAOs)

Additionally, the subcommittee will seek to attract skilled individuals, enhance investor protection to boost market confidence, and explore regulations for governing stablecoins and custody services.

Hong Kong's Competitive Advantage in Virtual Assets

Hong Kong has positioned itself as a key player in the virtual asset market. Its advantages include low tax rates, a clear legal framework, and strong investor protection mechanisms. According to Hu Zhenbang, CFO of OSL Group, Hong Kong's tax regime, which exempts value-added tax on assets, makes it appealing to investors compared to jurisdictions like Japan and Australia.

Hong Kong also benefits from its prominence as a financial hub, attracting international capital and enjoying strong backing from China. Notably, the favorable stance of Hong Kong's banking sector towards virtual assets, compared to its counterparts in Japan, fosters a conducive environment for virtual asset institutions.