Speech: Paul Chan, Financial Secretary of Hong Kong
The following is the speech by the Financial Secretary, Mr Paul Chan, at the POW'ER Hong Kong Web3 Innovators Summit today (January 9):
Mr. Wang Feng (Marsbit founder), Simon (Chen Ximing, Chairman of the Board of Directors of Hong Kong Cyberport Management Company Limited), Peter (Ren Jingxin, Chief Executive Officer of Hong Kong Cyberport Management Company Limited), Johnny (Wu Jiezhuang, Chairman of Gaonuo International Accelerator), Duncan (Chiu Dagen, Chairman of Hong Kong Information Technology Federation), pioneers of the industry, and friends:
Good morning! I am very happy to attend the opening ceremony of the Web3 Innovators Summit today and meet with a group of pioneers in the field of financial technology. I would like to take this opportunity to wish all my friends good health, great career, smooth work, happy life and successful career in the new year!
I know that some of you here today are visiting Hong Kong for the first time in a few years. Some of you may have had doubts about Hong Kong's development in the past, but recently I heard many of you speak highly of Hong Kong's new opportunities and development potential, so I came to see what it is all about. Your cutting-edge technology, market sense, and personal network are all advantages on the road to entrepreneurship. I believe that these advantages are what attracted you to come to Hong Kong to have a look. I can tell you that Hong Kong's development is standing at a new historical starting point, and the development of the Web3 ecosystem is also at a new stage. The combination of the two has brought us together today to witness the golden new starting point for the development of Web3.
As Mr. Wang Feng said, Web3 is a decentralized Internet concept based on blockchain, supported by DLT (Distributed Ledger Technology) distributed ledger technology, and can be effectively applied to multiple levels and links in the global financial market. In fact, many financial institutions are also exploring how to tokenize financial assets to improve efficiency and transparency; and are actively trying to use new concepts and technologies to solve decades of efficiency and security problems in clearing, settlement and payment. .
As far as the financial development related to Web3 and virtual technology is concerned, Hong Kong can be said to be at a golden new starting point. Allow me to make a brief explanation.
First, Hong Kong is entering a new stage of "governance and prosperity", and the new SAR government is fully promoting the combination of "proactive government" and "efficient market". Under the policy of "grabbing enterprises" and "grabbing talents", in the past two months, many leading innovation and technology companies and high-tech start-ups have actively contacted us, considering setting up international headquarters in Hong Kong or expanding their presence in Hong Kong. Many of Hong Kong's businesses are planning to be listed in Hong Kong.
In fact, Hong Kong has developed rapidly in the field of fintech in the past few years and has become one of the most dynamic fintech ecosystems in the region. The achievements are obvious to all. The virtual asset industry is also starting to develop steadily in Hong Kong. The SFC has granted two virtual exchange licenses, and the first virtual asset ETF was successfully listed recently. We are confident that Hong Kong will soon develop a thriving virtual asset ecosystem.
Second, Hong Kong's status as an international financial center. Hong Kong has been based in the international financial market for decades and enjoys a good reputation. Our regulatory framework and system are aligned with international rules and are widely recognized internationally, allowing financial technology companies in Hong Kong to better use Hong Kong as a platform to develop international business and explore cross-border cooperation.
In this context, we dared to publish the Policy Statement on the Development of Virtual Assets in Hong Kong in October last year, which we thought was a relatively appropriate time, to let innovators in the virtual asset business around the world know that Hong Kong embraces financial innovation and actively promotes the steady and prudent development of this market. Against the backdrop of repeated virtual asset exchanges bursting, Hong Kong has become the best foothold for high-quality virtual asset companies.
The characteristics of virtual assets and transactions have subverted many traditional business models; however, without proper supervision, the so-called "free-rider" problem will seriously weaken the sustainability of industry development. In this regard, our idea is to provide the market with appropriate and proportional supervision to unleash the potential of Web3 and other technologies so that they can improve the efficiency and transparency of economic, financial and other commercial activities at different links and levels, allowing The real economy, investors and citizens all benefit. When formulating regulatory details, we adopt the principle of "same activities, same risks, same supervision" to respond to actual and potential risks to ensure that while Web3 and virtual assets are flourishing, they will not compromise financial stability, investor protection, Improper supervision of financial activities and other aspects create risk gaps.
In terms of specific measures, we have recently completed the legislative work of setting up a licensing system for virtual asset service providers, and the new system will be implemented in June this year. Under the new system, the requirements for virtual asset exchanges in terms of anti-money laundering, counter-terrorism financing and investor protection are consistent with the requirements currently applicable to traditional financial institutions. I believe that it will provide a certain degree of market recognition for virtual asset exchanges. Subject to meeting relevant regulatory conditions, financial intermediaries and banks will be able to cooperate with licensed virtual asset exchanges when providing trading services to customers. This combination and linkage of virtual and real provides new soil, brewing new models, new markets, and new opportunities, and I believe it will also create a group of new winners.
In addition to supervision, governments and regulatory agencies are also conducting multiple pilot projects to test the technical advantages of virtual assets and explore their further application in financial markets. Pilot projects include the tokenization of government-issued green bonds for subscription by institutional investors and the cross-border application of eHKD, a central bank digital currency. Although these projects are small steps, they also demonstrate our commitment and determination to explore financial innovation with the global virtual asset community.
Dear guests and friends, we sincerely invite the global virtual asset industry to join us in leveraging the clear, precise, appropriate and best international standards and practices regulatory framework of Hong Kong International Financial Center to unleash the potential of financial innovation. We also welcome the global financial technology and virtual asset communities and talents to develop in Hong Kong and join us in embracing the huge opportunities brought by the development of Web3 and the virtual asset industry.
Finally, I wish the summit a complete success and that everyone returns with fruitful results. Thank you all, thank you!