Can Hong Kong Become a Global Web3 Center? Opportunities and Challenges Coexist

Recently, Hong Kong hosted a grand Web3 carnival event, once again attracting the attention of the global industry. With strong government support, Hong Kong seems to be becoming a new hotbed in the Web3 field, and it might even surpass Singapore. However, behind this prosperous scene, the outside world is more concerned about the upcoming new policies for Web3 and Hong Kong's regulatory direction in the Web3 space.

Globally, cryptocurrency regulatory policies are gradually tightening. Singapore, once hailed as "one of the most Web3-friendly countries," has begun to adjust its policies to prevent financial risks after events like Three Arrows Capital and FTX. South Korea has strengthened its regulatory efforts due to the Luna incident, while Japan has just released a white paper on Web3 projects. Although the United States has yet to establish a unified regulatory framework, it has recently taken frequent actions against the cryptocurrency industry.

In this situation, Hong Kong has become a new hope for many cryptocurrency companies seeking development. As early as 2019, Hong Kong was the preferred destination for cryptocurrency companies, but the hesitation at that time allowed Singapore to take the lead. Now, Hong Kong seems ready to make a fresh start. The Financial Secretary of the Hong Kong Special Administrative Region, Paul Chan, stated that after the sifting of the sand, it is the best time for the development of Web3.

However, Hong Kong's Web3 journey still faces many uncertainties. The primary task is to establish a stablecoin system, and the Hong Kong Monetary Authority is studying relevant regulatory frameworks, with the aim of implementing them in 2024. In addition, starting from June 1, 2023, Hong Kong will fully legalize cryptocurrency trading and plans to launch a stablecoin based on Asian currencies—the digital Hong Kong dollar.

The greatest uncertainty comes from regulatory issues. Hong Kong has stated that it will adopt a strategy that emphasizes both "appropriate regulation" and "promoting development," attempting to seek a balance between innovation and stability. However, achieving effective regulation without hindering the development of Web3 is a complex and daunting task.

For the entire industry, a lack of regulation could pose significant risks, while excessive regulation might stifle innovation. Hong Kong needs to find a balance between these two extremes, which will determine the potential for cryptocurrency businesses to develop long-term in Hong Kong.

Under the trend of globalization, Hong Kong's Web3 regulatory policies are difficult to be completely independent of other countries. It is unlikely that Hong Kong will become a regulatory no-man's land, and those hoping to find regulatory loopholes here may be disappointed. For Web3 to develop sustainably in Hong Kong, the government needs to demonstrate wisdom in policy design and find the right balance.

Whether Hong Kong can become a global Web3 center depends on how it responds to these challenges. Only by finding the right balance between regulation and innovation can Hong Kong truly realize its Web3 vision and become a new engine for industry development.