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

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.

Our Man in Shanghai: Filecoin the talk of the town, Polkadot and NFTs gain attention

Alipay

Retail investors are flocking to buy Filecoin on exchanges with predominately Chinese user bases and the head of the PBOC thinks the digital yuan has an uphill battle to take on Alipay and WeChat Pay.

Distributed storage network project Filecoin is the talk of the town as FIL was the most highly traded token on Huobi, OKEx and Gate on Thursday. These three exchanges have a predominantly Chinese user base and represent a large part of the Tier One trading volume for major pairs. On Thursday afternoon, Huobi trading volumes of FIL were more than three times that of BTC as the price reached a 7-day increase of 170%.

Filecoin has had strong success in capturing the attention of Chinese investors, including large investment groups such as Fenbushi Capital, SNZ Capital and Neo’s EcoFund. These three were part of a group that backed the $23 million Filecoin Ecosystem Fund, announced on March 25. The Filecoin Ecosystem Fund is intended to support projects and help development on the network. It could also give backers early access to new projects, which is a lucrative model for VCs in an increasingly crowded investment space. It remains to be seen which of these two consequences are a bigger priority for the funds involved.

On March 28, OKEx produced a video explaining the concepts behind Filecoin, which received around 600 shares and 3400 likes on Weibo. This shows a high level of attention from the Chinese retail audience, a demographic that is tough to obtain and hard to preserve over longer time-frames.

NFTs in Beijing, Polkadot in Hangzhou

Beijing-based BlockCreateArt hosted a major NFT art exhibition on March 26 supported by auction house Christie’s, Digital Finance Group and mining rig producer Bitmain. Interest in digital art has increased on some levels in China, but cultural and artistic differences have led to a more pragmatic approach towards leading digital artists such as Beeple. The exhibition will be stopping in Shanghai early in April.

Hangzhou was home to the Open Days blockchain exhibition sponsored by Candaq Fintech Group. The event had one hall dedicated to Polkadot projects, with speakers from Rarelink, Litenty and Phala, among others. The upcoming parachain auctions have become a topic of interest with so many local projects and projects with ties to the region being built on Polkadot.

Central bank head says digital yuan playing catch-up

The head of the Digital Currency Research Institute at the People’s Bank of China has recognized that private payment processors Alipay and WeChat Pay are in a dominant position in the Chinese payment space. During a panel appearance, Wang Changchun noted that the government-backed digital currency would be needed to maintain stability should something happen to the existing solutions. For the moment, WeChat Pay and Alipay don’t seem to be in any imminent danger of losing their market share, but that could change quickly if government-led incentives were put in place for those willing to convert.

In enterprise news, electric vehicles brand IM Motors, working with SAIC Motor and Alibaba, announced a blockchain powered service network that would incentivize customers to share data with the company. In order to achieve some level of traceability and resistance to tampering, on-chain points would be given to customers using the vehicle and related apps.

The blockchain network was announced as exclusive and private, so while it represents a slight normalization of blockchain technology, it will likely have much in common with more centralized storage networks.

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Gate