Head of Fintech at InvestHK: From a business and strategic perspective, what does the Hong Kong government think about the future development direction of Web3?

On April 13, King Leung, head of InvestHK’s fintech, delivered a keynote speech at the Web3 Carnival. This article is a summary of the text.

Speech: King Leung, Head of Fintech, InvestHK

Hello everyone! Today, I am very honored to have this opportunity with Wanxiang and HashKey to share with you some of the views of the Hong Kong government. First of all, I would like to thank Mr. Xiao and Mr. Du for their support, which has made Hong Kong the most powerful Web3 Hub in the world in the past few days.

In the past few days, you have heard a lot of sharing from Hong Kong government leaders about policy or regulatory developments. Today, I would like to share with you from another perspective. From the business and strategy levels, how does the Hong Kong government view the future development direction of Web3?

Yesterday, Financial Secretary Mr. Paul Chan also shared with you the Hong Kong government's support for Web3. I want to emphasize what is Hong Kong's ultimate strategy, positioning, and purpose? In fact, our focus is on how to use the nodes of technological development to enable Hong Kong's real economy to improve its capabilities and make a leap forward. This is our positioning. It is not just about virtual currencies, etc., but also about the larger market size.

If some investors are doing it, how big will everyone think? Maximizing. The Hong Kong government's Ambition is not a virtual currency, but the scale of the entire tokenization market, which is in the tens of billions. The assets behind it include other so-called real economy assets, bonds, and PE.

In the past few days, I have discussed "data" with some mainland leaders. Data is also a very important asset. Some friends in the mainland are not very concerned about the development of data. In fact, many cities in mainland China already have data exchanges. Now data has become an asset with a price that can be traded. This is the direction of future development. After tokenization, many assets can improve liquidity, so the scale of accumulation is massive.

Credit technology, Web3, and virtual assets. You may think that this sector is just finance. In fact, this is not right. Hong Kong’s unique advantage is that the positioning of Hong Kong as an international center is mentioned in the "Chief Executive's 2021 Policy Address", but in the "14th Five-Year Plan", Hong Kong is China's center for international cultural and artistic exchanges.

In 2020, Hong Kong has surpassed London to become the world's second largest art auction market. Due to time constraints today, there are still many data that I have not had the opportunity to share. But Hong Kong is one of the cities with the highest concentration of high net wealth and family offices in the world, ranking in the top three. The wealth in Hong Kong is very impressive. Hong Kong is also the world's second largest cross-border wealth management market, and the wealth in Hong Kong is massive.

From the perspective of talent, does Hong Kong lack technology talents? No, there are many categories of technology talents. From the perspective of Web3 and virtual assets, the most important ability is blockchain ability. If you are not clear, let me share with you the global scores of CoinDesk in the UK in the past few years to see the ability of global universities in the development of technology chains. I am proud to say that Hong Kong is great. 4 of the 20 universities in Hong Kong are in the top 20, and the Hong Kong Polytechnic University is ranked first in the world in blockchain universities. I am very proud.

But Hong Kong also has gaps, and the University of Hong Kong has done very well in many areas. (As shown in the figure) As the colors in the figure indicate, yellow represents the ability to research and write articles, blue represents the richness of blockchain courses, but red represents the connection with enterprises to help students find jobs and find patterns after graduation. This is a good opportunity we see now. In the past, many institutions did not know that there were so many talents in Hong Kong. Now we are working hard to communicate with the industry. If you are looking for blockchain talents, there are many talents in Hong Kong. If you want to connect, you can directly contact me. I can help you introduce capable professors and universities in Hong Kong.

There are also many policies that have been implemented. Here are a few examples:

First, high-end talent plan.

It is fast and simple. Once you get a Hong Kong visa, you can join the Hong Kong family. How fast is it? I heard that the fastest approval time is 1 day, and the average time is 4 days. Thanks to the efforts of the Hong Kong government, talents from all over the world, especially from mainland China, can join the Hong Kong family.

Second, enterprises.

On December 23, 2022, Hong Kong created a new institution, OASES, the Office for the Introduction of Key Enterprises. This is a very high-level institution that reports directly to Mr. Chan Mo-po. We want to invite very capable institutions to join the Hong Kong family, empower the Hong Kong ecosystem, and enhance capabilities. If you need to discuss policy benefits, they have policies to discuss with you. If you are interested, you can also find me. I can introduce colleagues from OASES to you.

Third, funding.

The newly established institution in 2022 is called Hong Kong Investment Crop. This is a fund allocated by the Hong Kong government of HK$62 billion (US$8 billion) spread across four different funds, mainly invested in different tracks, divided into four tracks:

(1) Financial technology, including virtual assets and Web3.

（2）Biotech life science。

(3) Artificial intelligence and big data.

(4) High-end manufacturing industry.

These are the four important tracks that Hong Kong will focus on investing in and nurturing in the future.

October 31, 2022, is a very important milestone in the development of Web3 virtual assets in Hong Kong. Many Hong Kong government leaders (including Mr. Paul Chan, Director of the Regulatory Authority, Raymond Hui, and leaders of the Securities and Futures Commission) let the world know Hong Kong’s determination to develop virtual assets.

But we are not just talking, we have actual implementation to let everyone see our determination.

In mid-December 2022, Hong Kong launched Asia’s first Bitcoin currency and Ethereum futures EFT. The institutional background of issuing NFT is the Chinese-based Southern China Asset Management SCOP, which is very interesting and demonstrates Hong Kong’s determination and advantages in the "one country, two systems" policy.

In mid-February 2023, the government issued the world’s first tokenized version of a government-issued green bond, which was launched in mid-February.

On February 22, 2023, the Hong Kong government launched a budget. First, 50 million Hong Kong dollars were allocated to Cyberport to promote the development of Web3, mainly for publicity and promotion. Second, the government allocated 100 million Hong Kong dollars to develop family offices. From another perspective, virtual assets are also alternative assets, so in the current market size, some institutional investors already have a lot of allocation in outumn assets. Generally, it is 5%-15%, but there is another group, which is high net wealth and family office. According to many research reports, this group is almost zero, with very low valuation. There are massive business opportunities in digital assets, because this aspect is a blue ocean. We are very actively attracting family offices around the world (including mainland China) to place their presence in Hong Kong. Another level is to connect with many innovative application products and connect with funds.

We are also looking forward to the launch of a new license on June 1, 2023. Will VSP be open to retail investors? We are very closely connected with the China Securities Regulatory Commission to let everyone know the information in this regard. There are many things (such as stablecoins) that will happen this year.

I started out as a start-up. I have been in the government for about four years. I have witnessed with my own eyes that a very important juncture in Hong Kong is the rebound. Hong Kong is back.

If you were at the venue yesterday, you should have felt the enthusiasm. I went to some branch venues yesterday and they were also packed. If you have had the opportunity to think of Web3 virtual asset activities before, you will think of Consensus in the United States. I hope everyone will remember this day. The first step is to make Hong Kong the world's leading Web3 center. In the future, if you think of an event and think of Web3, you will not think of Consensus, but Web3 Festival. You will also think of Hong Kong. I hope that in the future, everyone can feel the sincerity of the Hong Kong government and work together to make Hong Kong a global Web3 center. Thank you!