With full support from the central government at the Two Sessions for Hong Kong and Macao to boost their economies, can Hong Kong's new crypto policies write another "Legend of the Fragrant Harbor"?
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With full support from the central government at the Two Sessions for Hong Kong and Macao to boost their economies, can Hong Kong's new crypto policies write another "Legend of the Fragrant Harbor"?
To understand the major trends in Hong Kong's development, the National Two Sessions serve as the most important window.
Navigating Web3 tides with focused insightsTo understand Hong Kong's development trajectory, the National Two Sessions serve as the most important window.
The Government Work Report released on March 5 outlined key priorities for Hong Kong, Macao, and Taiwan this year, including supporting Hong Kong and Macao in economic development and improving people's livelihoods, while maintaining their long-term prosperity and stability. Notably, compared to last year’s report, “supporting Hong Kong and Macao’s economic development” has become the central government’s top priority regarding Hong Kong.
"This year's Government Work Report once again demonstrates the central government’s unwavering support for Hong Kong’s development, boosting confidence among Hong Kong residents in advancing economic growth and improving livelihoods," said Andrew Tang, a member of the National Committee of the Chinese People's Political Consultative Conference and Chairman of the Board of West Kowloon Cultural District Authority in Hong Kong.
Regaining its status as a global crypto finance hub and virtual asset center is emerging as a crucial lever for Hong Kong’s economic revitalization in the new era. Since October last year, the Hong Kong government has sent a series of positive signals, with relevant policy consultations now underway.
Hong Kong’s increasingly favorable signals toward the crypto market have drawn intense global attention from industry players and investors alike.
With central-level guidance setting the direction and Hong Kong actively leveraging its strengths, a grand narrative of “a王者归来 (return of the king)” is unfolding along the banks of the Victoria Harbour.
A Cradle of the Past
Hong Kong was once the cradle of the cryptocurrency industry.
Since the inception of the blockchain industry, ethnic Chinese entrepreneurs have consistently played a pivotal role. As an international financial center closest to mainland China and highly open in policy, Hong Kong has long served as a critical node for expanding global blockchain ventures. During the previous bull cycle alone, Hong Kong nurtured leading industry players and projects such as FTX, Animoca Brands, and Crypto.com. Huobi (formerly known as "Old Huobi") and Binance have also maintained significant operations and deep investments in Hong Kong.
However, due to various reasons, crypto firms like FTX and BitMEX gradually relocated from Hong Kong. Talent drain, project migration, and ecosystem erosion caused Hong Kong to seemingly fall from grace. Meanwhile, the dominant narrative in the crypto world gradually shifted westward. Especially over the past year, the prevailing discourse about Web3 migrating toward Singapore further suggested that after missing out on the internet era, Hong Kong risked falling behind again in the Web3 age.
That changed last year, particularly after the new Hong Kong administration took office. Hong Kong clearly refocused its strategy, reorganizing policies and preparing to aggressively compete with cities like Singapore, London, and New York for leadership in global crypto finance and virtual assets.
Moreover, a series of black swan events during the 2022 bear market presented Hong Kong with a rare strategic opportunity. Following the collapse of major projects and crypto institutions such as UST/LUNA, FTX, and Genesis, the U.S. and Europe began reevaluating their regulatory approaches to the crypto sector. It is foreseeable that the crypto industry will likely face stricter and more comprehensive regulations in Western markets.
This has redirected industry focus back to the East.
Market observers predict that more digital asset activities will shift eastward—providing Hong Kong with a golden chance to reclaim its influence in the crypto industry. This time, Hong Kong is determined not to miss the boat.
An Unexpected Turnaround
On October 31 last year, Hong Kong’s Financial Services and the Treasury Bureau officially released the “Policy Statement on Development of Virtual Assets in Hong Kong,” instantly capturing the attention of global Web3 practitioners and institutions.
In this sub-4,000-word document, the Hong Kong SAR government emphasized its support and protection for virtual assets and related industries, proposing a series of plans concerning regulation, investor rights, and property ownership. It also introduced three upcoming pilot initiatives: NFTs at FinTech Week, green bond tokenization, and the “Digital Hong Kong Dollar.” Additionally, it expressed a vision to attract talent in the Web3 sector to reinforce Hong Kong’s position as an international financial center.
Global industry leaders responded positively. Justin Sun, founder of TRON and global advisory board member of Huobi, stated: “The springtime for Chinese Web3 entrepreneurs has arrived.” Cameron Winklevoss, co-founder of Gemini, tweeted bluntly: “The next bull market will begin in the East.” Coinbase CEO Brian Armstrong also implied that Hong Kong is currently one of the leading jurisdictions in the digital asset space.
Many professionals exclaimed: “This ‘Declaration’ means Hong Kong is ‘back.’”
The recent climax came on February 20 this year, when the Securities and Futures Commission (SFC) of Hong Kong launched a consultation on proposed regulations for virtual asset trading platforms, seeking public feedback on a new licensing regime set to take effect on June 1. The announcement triggered a surge in the crypto community and sparked a rally in so-called “Hong Kong concept coins.”
Market reactions reflect genuine industry confidence. In response, media outlets commented: “Hong Kong is quietly becoming the center of Eastern Web3.0.”
Analysts point out that Hong Kong still holds strong advantages in Web3.0. As one of the world’s most powerful capital markets, Hong Kong benefits from a robust financial regulatory framework and top-tier financial and technical talent. Data shows that over 600 fintech companies are now based in Hong Kong, and nearly 40% of newly established fintech firms in the past year originated from the blockchain sector.
An even more encouraging underlying reality adds to the optimism. According to Bloomberg, the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region has been closely monitoring the progress of Hong Kong’s new crypto policies. Thus, many believe that although mainland China hasn't relaxed its stance on the crypto industry, “Hong Kong serving as a testing ground” has become an undeniable fact. Mainland China’s crypto policies and Hong Kong’s new initiatives can complement each other, balancing the risks and rewards of coexisting traditional and emerging models, thereby ensuring China remains competitive in the next technological revolution.
A Pearl Rejuvenated, Poised to Renew Chinese Excellence
As the saying goes, ducks know first when spring water warms. Under these policy “tailwinds,” major capital firms and crypto investors are publicly declaring their renewed commitment to Hong Kong.
Mainstream crypto exchanges are taking the lead. An increasing number are being attracted by Hong Kong’s more accommodating policy stance. Multiple exchanges are applying for Hong Kong crypto trading licenses; OKX has already formed a dedicated team to manage its compliance process in Hong Kong.
Justin Sun, who never misses a market trend, moved swiftly into action.It is reported that Huobi is applying for a Hong Kong crypto trading license and plans to launch a new exchange, Huobi Hong Kong.
“Hong Kong’s series of crypto policies carry global significance—they could trigger policy shifts in other Asian countries or even in the United States—and represent a long-overdue blessing for the crypto industry,” said Justin Sun. He believes Hong Kong possesses unique geographical advantages and a mature financial system, laying a solid foundation for cryptocurrency development.
Additionally, the sense of belonging, linguistic proximity, cultural affinity, and geographical closeness offered by Hong Kong will serve as powerful drivers for Chinese crypto enterprises.
However, it should be noted that while the SFC’s recent consultation paper signaled Hong Kong’s intention to open virtual asset trading to retail investors, it clearly stipulated that “any virtual asset trading platform operating in or marketing to Hong Kong investors must obtain a license from the SFC.” This means that only licensed entities will be permitted to operate in Hong Kong after June 1. Therefore, the overall goal of Hong Kong’s new crypto policies is to formalize and legalize virtual asset trading—not to lift regulations unconditionally.
“Recently, Hong Kong has completed legislative work to establish a licensing regime for virtual asset service providers. Under the new system, exchanges will be required to meet anti-money laundering, counter-terrorism financing, and investor protection standards consistent with those applied to traditional financial institutions. This should provide a certain level of market credibility for virtual asset exchanges,” said Paul Chan, Financial Secretary of the Hong Kong SAR and Chairperson of the Task Force on Promoting Hong Kong’s Unique Advantages. He added that the Hong Kong government and financial regulators are working together to create a conducive environment for the sustainable and responsible development of Hong Kong’s virtual asset industry.
Under this strengthened compliance and licensed-operating regulatory framework, large-scale, well-established institutions with a history of prudent operations and proven compliance experience are clearly positioned to benefit the most.
Justin Sun stated that TRON and Huobi will fully support Hong Kong’s new policies, closely monitor subsequent developments, actively apply for relevant compliance licenses, and aim to collaborate with the Hong Kong government in areas such as stablecoins, NFTs, and exchange services, positioning themselves as the preferred partner for Hong Kong clients and Web3 entrepreneurs.
Coinbase CEO Brian Armstrong cited news of “Hong Kong potentially opening crypto trading to citizens” on Twitter, explicitly stating that Hong Kong is currently at the forefront of openness toward the crypto industry. Crypto.com CEO Kris Marszalek shared similar views, tweeting praise: “Hong Kong’s new Web3 policies are great news for the entire industry—the city’s ambition to rebuild a vibrant crypto hub is now unmistakable.”
Beyond enthusiastic industry responses, Hong Kong’s business leaders are also joining the Web3 wave. Adrian Cheng, CEO of real estate giant New World Development, announced he has added crypto custodian Hex Trust and blockchain infrastructure developer ConsenSys to his investment portfolio, making a bold bet on Web3 and shaping his group’s future in Hong Kong.
It is foreseeable that as more crypto institutions and industry leaders enter Hong Kong, the city will foster an inclusive and thriving ecosystem for the crypto industry, continuing to write the Chinese story in the crypto world.
The convening of the Two Sessions provides macro-level policy guidance and momentum for Hong Kong’s future development. As Asia’s financial hub, Hong Kong’s active exploration of cryptocurrency regulation and innovation creates opportunities for new economic growth. At the same time, Hong Kong continues to uphold the principle of “one country, two systems,” maintaining complementarity and cooperation with the mainland in the cryptocurrency domain. The Two Sessions not only boost confidence in Web3 development within Hong Kong but also enable the mainland to learn from Hong Kong’s experiences in the future, helping China reclaim leadership in Web3 development—an Eastern-led narrative—and ultimately write a new chapter of excellence.
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