Gate.io to enter Hong Kong following city’s $6.4M budget allocation to Web3

February 23, 2023 Coin Telegraph

Budget

Gate’s founder called Hong Kong a “hub,” meanwhile, the city’s financial secretary said the region “must keep up” with the “huge potential” of Web3.

Cryptocurrency exchange Gate.io is gearing up to launch a presence in Hong Kong following the local government's planned $6.4 million (50 million Hong Kong dollar) cash injection into Web3 as per the city’s 2023-24 budget.

Gate Group said on Feb. 22 that it will apply for a crypto license in Hong Kong allowing it to launch “Gate HK.” The firm's local company, Hippo Financial Services, gained a license in August 2022 to provide virtual asset custodial services.

It comes as Hong Kong financial secretary, Paul Chan, announced the Web3-related funding and the creation of a crypto task force in a Feb. 22 budget speech.

He added Web3 has “huge potential” and the Special Administrative Region of China must keep pace with its “continuous development.”

“We must keep up with the times and seize this golden opportunity to spearhead innovation development.”

Chan outlined the funds would go toward expediting “the Web3 ecosystem development” by organizing international seminars, promoting business cooperation and arranging “workshops for young people.”

He noted a “large number” of companies are considering setting up shop in the city due to the government’s cryptocurrency laws. Gate Group’s founder, Dr. Han Lin, called Hong Kong “a global strategic market” and a “hub” due to its “industry-leading regulatory regime.”

Very excited about Hong Kong. Having obtained the TCSP License in HK, Gate Group is also preparing for a crypto license and fine tuning Gate HK, a new entity tailored to serve HK’s growing crypto market, stay tuned.
— Lin Han (@han_gate) February 21, 2023

Hong Kong shared its plans on Feb. 20 with a new licensing regime and a proposal to allow retail traders access to licensed crypto platforms.

Due to the influx of business interest, Chan said he “will establish and lead a task force” on virtual asset development made up of members from financial regulators, market participants and “relevant policy bureaux.”

The task force would “provide recommendations on the sustainable and responsible development of the sector” according to Chan.

Hong Kong started its push to gain status as a global crypto hub in October 2022 by launching crypto-friendly policy frameworks to regulate the industry within the city.

Despite being a region of China, the city’s special status allows for its own laws and governance. Hong Kong’s crypto push would seem to be in contrast to China’s crypto ban, but it's reported that officials in Beijing are quietly backing the region's crypto ambitions.

Hong Kong’s crypto ambition gets subtle nod from Beijing: Report

February 21, 2023 Coin Telegraph

Asia

While China has cracked down on cryptocurrencies in the mainland, it’s apparently taking a softer approach to Hong Kong’s crypto hub aspirations.

Hong Kong’s ambition of becoming a cryptocurrency hub is reportedly seeing subtle support from the Chinese government, in what could be seen as a contrast to the mainland’s hard-line anti-crypto stance.

In October last year, the government of Hong Kong floated the idea of introducing its own bill to regulate crypto and allow retail investors to “directly invest into virtual assets” that could possibly be in contrast to China’s widespread crypto ban.

According to people familiar with the matter, Beijing officials have not been brazenly opposed to the idea. According to a Feb. 20 Bloomberg report, it is understood that representatives from the China Liaison Office have been frequenting Hong Kong crypto gatherings seeking to understand what’s going on.

So far, their encounters with Beijing officials on the matter have been friendly, according to those familiar, which is being perceived by local crypto business operators that Beijing — albeit very subtly — may be open to using Hong Kong as a testbed for crypto.

New Bitcoin narrative brewing: Hong Kong is getting into crypto.

What makes it even more interesting is the People's Bank of China is one of the only central banks in the world cutting rates & easing.

Asia is bidding [sources] pic.twitter.com/n5cwE7jI2l
— Luke Martin (@VentureCoinist) February 16, 2023

Hong Kong is a Special Administrative Region of China, allowing it to have its own laws and governance. The former British colony was transferred back to China in 1997 following a guarantee from Beijing there would be no Chinese interference with the region’s economic and political systems for 50 years, known as the “one country, two systems” principle.

National People’s Congress member and digital asset lawyer Nick Chan was quoted as saying that as long as there are no violations of “the bottom line, to not threaten financial stability in China,” then the city is free to undertake its own pursuits.

On Feb. 20, Hong Kong’s Securities and Futures Commission outlined a new crypto license regime that proposed that all centralized exchanges that operate in the region must be licensed with the regulator.

It also proposed allowing retail traders access to licensed cryptocurrency trading platforms, saying public feedback highlighted that denying access to crypto markets may push Hong Kongers to trade on unregulated overseas platforms.

The new regulatory push has spurred many crypto businesses to seek expansion into the city. Most recently the exchange Huobi Global said it would seek a local license and plans to open a new Hong Kong-only exchange with a focus on institutional and high-net-worth individuals.

HK legislator’s firm to lure 1,000 Web3 start-ups over 3 years

December 23, 2022 Coin Telegraph

Coin Telegraph

G-Rocket is aiming to attract 1,000 Web3 start-ups to Hong Kong and will help them with banking, government services and office spaces.

A start-up accelerator co-founded by Hong Kong legislative council member Jonny Ng Kit-Chong wants to attract 1,000 Web3 businesses to set up shop in the city-state over the next three years.

Ng Kit-Chong is a member of the legislative council for the election committee constituency and has been in office since January this year. The engineer and politician has his finger in a lot of pots as he has declared owning shares in roughly 40 different companies.

One such company is the start-up accelerator G-Rocket, which he co-founded alongside Casper Wong in 2016.

Wong is the current CEO and spoke to the South China Morning Post on Dec. 23 about the firm’s new aptly named program “Hong Kong Web 3.0 Hub.”

The CEO outlined that G-Rocket is first looking to help 100 Web3 start-ups get their business off the ground, before scaling the number up to 1,000 within three years.

“We hope to help bring good companies and talent back to Hong Kong in the post-pandemic era,” Wong said.

In particular, Wong stated that the firm will work in tandem with the virtual ZA Bank, a government-run incubator dubbed Cyberport and property conglomerate New World Development to help Hong Kong startups get access to office space, banking and government services.

Broader Web3 push

G-Rocket’s initiative comes as part of a broader push from the Hong Kong government to make the special administrative region (SAR) of China a crypto hub that can compete with Singapore.

In late October, Elizabeth Wong, the head of the fintech unit at the Securities and Futures Commission (SFC) of Hong Kong, announced a host of progressive regulatory crypto proposals, including the legalization of virtual asset trading.

“We will put in place timely and necessary crash barriers to mitigate actual and potential risks in line with international standards, so that virtual asset innovations can thrive in Hong Kong in a sustainable manner,” an Oct. 31 government statement read.

As of Oct. 31, the SFC also started allowing listings for exchange traded funds (ETFs) that offer exposure to Bitcoin (BTC) and Ether (ETH), with CSOP Asset Management being one of the first to jump in.

Cointelegraph reported on Dec. 15 that CSOP Asset Management had raised $73.6 million in investments ahead of listing two crypto futures ETFs on the Hong Kong Stock exchange the following day.

On Dec. 8, Hong Kong’s legislative council also passed an amendment to its Anti-Money Laundering (AML) and terrorist financing system to include virtual asset service providers alongside traditional finance institutions.

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Bermuda confirms crypto hub ambitions despite market downturn

June 6, 2022 Coin Telegraph

Bermuda

“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub,” said Bermuda’s minister of economy and labor, Jason Hayward.

The Bermuda government is pushing on with its ambitious plans to become a cryptocurrency hub despite the massive market downturn in 2022.

The small island territory known for its pristine pink sand beaches and attractive taxation policies has been actively expanding its crypto sector since 2017, according to Bermuda’s minister of economy and labor, Jason Hayward.

He noted on June 3 that the government remains unfazed by the recent crash caused by the collapse of the Terra ecosystem in May, as the market has weathered many storms since 2017.

Speaking with the Wall Street Journal (WSJ), Hayward pointed to the experience of the economy and local regulators in dealing with foreign business as a key factor that will help Bermuda become a crypto hub. He also bullishly stated that the crash will not hamper its plans moving forward:

“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub.”

“This industry downturn is likely to advance our goal and positively impact our long-term growth and role in this sector,” he added.

So far the Bermuda Monetary Authority (BMA) has granted a total of 14 licenses for crypto firms to operate out of the British island territory, with four of those being approved in 2022, noted Crag Swan, chief executive of the BMA.

The total list includes companies such as multi-asset-class trading firm Class T, crypto exchange Bittrex Global, USD Coin (USDC) issuers Circle Internet Financial Ltd., and crypto interest account providers BlockFi, who obtained a license in January earlier this year.

Swan highlighted, however, that the BMA is not looking to accept anyone that wants to set up shop in Bermuda and is looking at quality over quantity as part of its crypto hub ambitions.

“So obviously the persons that we want in Bermuda must be fit and proper because essentially we’re looking at maintaining the jurisdiction’s quality name,” he said.

Hayward stated that Bermuda’s licensing process is broken down into three stages: the testing license, a modified license, and finally the fully approved operating license. The testing phase usually lasts between three to 12 months but did not provide a comment on how long it takes to get fully licensed by the BMA.

Commenting on the regulatory landscape in Bermuda, the president of the Financial & International Business Association (FATF) David Schwartz, told the WSJ that the Bermuda government has been making strides in its anti-money laundering compliance initiatives since 2020, but there was still work to be done.

The Paris-based FATF sets global AML-standards, and Schwartz suggested the success of Bermuda’s crypto sector may hinge on how strongly the government oversees and regulates the companies that it offers licenses to:

“They’ve got great rules and regulations and laws, but it’s all about the implementation at the end of the day.”

World Bank won’t support Central African Republic’s Sango crypto hub

May 26, 2022 Coin Telegraph

Bank of Central African States

The World Bank has said “it will be physically impossible” for the lender to fund the planned Sango crypto hub and voiced concerns regarding the country’s adoption of Bitcoin.

The World Bank has signalled its concerns over the Central African Republic (CAR) adopting Bitcoin (BTC) as a legal currency and says it won’t support the newly announced “Sango” crypto hub.

At the end of April CAR president Faustin-Archange Touadéra established a regulatory framework for cryptocurrency in the country and adopted Bitcoin as a legal tender. On May 24 he announced a plan to launch the country’s first crypto hub called “Sango”.

Sango is described as the country’s first “Crypto Initiative” — a legal hub for crypto related businesses encompassing economic policies including no corporate or income tax and thecreation of a virtual and physical “Crypto Island.”

An official document outlining the Sango project states that the country “received approval for a $35 million development fund from The World Bank for the digitization of the public sector.”

However a spokesperson for the institution told Bloomberg via email the recently approved grant “is unrelated to any cryptocurrency initiative.” and that “the World Bank is not supporting ‘Sango – The First Crypto Initiative Project’.”

The $35 million grant from the World Bank announced May 5 was meant for updating and digitizing the existing public financial management system such as improving digital bank payments.

In the statement The World Bank added “it will be physically impossible” for the institution to fund the Sango project and expressed disapproval of the CAR’s adoption of Bitcoin:

“We have concerns regarding transparency as well as the potential implications for financial inclusion, the financial sector and public finance at large, in addition to environmental shortcomings.”

CAR’s Bitcoin adoption has also caught the ire of the governor of the Bank of Central African States (BEAC) Abbas Mahamat Tolli who wrote a scathing letter to CAR Finance Minister Hervé Ndoba shortly after news of the adoption.

In the letter Tolli wrote the new law “suggests that its main objective is to establish a Central African currency beyond the control of the BEAC that could compete with or displace the legal currency” which he believes would “jeopardize monetary stability”.

The World Bank echoed the sentiment saying:

“It is important that the relevant regional institutions, such as the central bank and the banking authorities, are fully consulted and remain in the driver’s seat.”

There is a growing dislike of the CFA franc — the official fiat currency of the CAR pegged to the euro in the country. Meanwhile crypto adoption rates have skyrocketed in Africa according to a March report from crypto exchange KuCoin showing crypto transactions increased by over 2,500% in 2021.

It’s unclear what the adoption rate of crypto is within CAR specifically. The country only has an internet penetration rate of just over 7% of the total population according to data from DataReportal dated January 2022 meaning only around 350,000 individuals are even online.

SBF opens Aussie Blockchain Week as govt says we’re “open for business”

March 21, 2022 Coin Telegraph

APAC

Sam Bankman-Fried, CEO of FTX, said the world is “very much” looking for a crypto hub in APAC, adding that other locations “haven’t played out”.

FTX CEO Sam Bankman-Fried gave the opening keynote at this year's Blockchain Week, with the events of day one held at the headquarters of the Australian Securities Exchange (ASX).

Addressing the event remotely from the Bahamas, Bankman-Fried used his keynote to announce the launch of FTX Australia, localizing one of the world's largest crypto exchanges by volume. FTX is the naming rights sponsor for the event.

“This is something that has been in the works for a number of months, and it’s been a really high priority for us as a company.”

Really excited to launch FTX: Australia!https://t.co/ZcBNEuyiG9 https://t.co/jGumMSXMW3 https://t.co/rABSI5Y81O
— SBF (@SBF_FTX) March 20, 2022

According to Bankman-Fried, the launch in Australia is part of a larger move for the exchange to be licensed and regulated in as many countries as possible.

He said that the world is “very much” looking for a regional hub in APAC for crypto, stating that other locations in the region “haven’t played out as expected”.

“I think that has really left an opening for someplace to kind of grab that and service that region,” he added.

Australia is looking to market itself as a crypto hub, with comments from the Federal Minister for Financial Services and the Digital Economy, Senator Jane Hume, stating that the country is “open for business” when it comes to cryptocurrencies.

Giving her address at the conference, Hume said that the crypto ecosystem is the new frontier, adding:

“If you want to be a pioneer on the virtual frontier of innovation, Australia is open for business. As the Minister for the digital economy and the Minister for financial services, I personally am backing you.”

The comments echoed those of her colleague, Senator Andrew Bragg, who provided the opening address to the conference. Bragg used his speech to announce the proposal of legislation to reform regulations for decentralized autonomous organizations (DAOs), de-banking, taxes, and licensing for crypto firms in Australia.

Comparing crypto to the internet boom in the late 1990s, Hume stated that the digital asset economy could add around 2.6% to Australia’s GDP and create around 200,000 new jobs by 2030, and warned that Australia could “miss out” if the incorrect regulatory framework is applied.

“We want to encourage innovation in crypto assets, because innovation is what creates prosperity, it’s what creates jobs and economic growth.”

“There are so many innovative use cases for crypto assets, many of which are now not at all far away from becoming mainstream,” she stated.

According to the latest opinion poll, the current government is sitting a full 10 points behind the opposition on a two-party preferred basis. A looming federal election in May might jeopardize the plans of Senators Bragg and Hume, but a pro-crypto stance could be the governments' strategy for re-election, swaying younger voters towards the coalition.

Other speakers of note at day one of the five-day event Blockchain Week include Kris Marszalek, CEO of Crypto.com, Leigh Travers, CEO of Binance AU, Brooks Entwistle, SVP of Global Customer Success and Managing Director of APAC and MENA at Ripple, and Joseph Lubin, Co-founder of Ethereum.

Singapore Strives to Become Global Crypto Hub, Monetary Authority Reveals

November 2, 2021 Bitcoin.com

crypto hub

Broader Web3 push

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