Hong Kong’s Cyberport Registers Up 150 Web3 Firms in Past Year

Hong Kong’s Cyberport Registers Up 150 Web3 Firms in Past Year – City Financial Secretary

Updated: 19 June 2023

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Hong Kong’s Cyberport, supported by the government, has witnessed a remarkable influx of registrations from over 150 Web3-related companies in the past year, according to Paul Chan, the city’s financial secretary.

In a recent blog post, Chan highlighted the growth of the technology business park and its efforts to attract Web3-based firms. The financial secretary allocated HK$50 million (US$6.39 million) exclusively to Cyberport, aimed at promoting the development of Web3 companies and fostering the technology sector’s expansion within the city.

Continued Growth of Cyberport

Since its inauguration in January, Cyberport has flourished as a hub for digital technology companies, accommodating over 1,900 enterprises currently stationed or registered there. Notable names include Hashkey Group, a licensed cryptocurrency exchange; Animoca Brands, a Web3 venture capital and game developer; and ConsenSys, the Ethereum software firm responsible for the popular crypto wallet MetaMask.

The influx of Web3 firms further bolsters Cyberport’s reputation as a leading technology ecosystem. Web3 represents the next phase of internet development, leveraging cutting-edge technologies such as blockchain, artificial intelligence, the Internet of Things (IoT), and the Metaverse.

With its focus on decentralization, transparency, and user empowerment, Web3 has the potential to revolutionize various sectors, including finance, entertainment, and governance. Hong Kong’s proactive approach to attracting Web3 companies underscores its commitment to remaining at the forefront of technological advancements.

Hong Kong's financial secretary — Paul Chan, Financial Secretary of Hong Kong, gives a speech during the Hong Kong Web3 Innovator Summit & Web3 Hub@Cyberport inauguration ceremony

Hong Kong’s Cryptocurrency Regulation

Hong Kong has taken significant steps to establish itself as a global hub for digital assets. On June 1, the city implemented new licensing rules for cryptocurrency trading platforms catering to retail investors. The Securities and Futures Commission (SFC) outlined measures to safeguard retail investors, including stringent onboarding processes, governance standards, comprehensive token due diligence, admission criteria, and disclosures.

During the inauguration, Chan said:

“In working out the details of the regulatory framework, we have adopted a “same activity, same risk, same regulation” approach in response to actual and potential risks to ensure that there are no gaps in our financial stability, investor protection or regulation of improper funding activities that would allow risks to emerge.”

On February 20, Huobi, a cryptocurrency exchange, revealed its efforts to secure a cryptocurrency license in Hong Kong. The company expressed its enthusiasm for the city’s favorable stance on cryptocurrencies through a tweet.

Exciting news! Huobi is stoked about Hong Kong's pro-crypto policies & we're working hard to secure our crypto license there. Our aim is to be one of the first fully compliant exchanges in HK & collaborate with our Asia-Pacific users to drive digital asset growth! #Huobi #Crypto pic.twitter.com/ktZw1WE2cs

— Huobi (@HuobiGlobal) February 20, 2023

The regulatory framework seeks to strike a balance between facilitating growth and ensuring investor protection in the cryptocurrency industry.

Hong Kong Gets Support from Chinese Leadership

There are indications that Hong Kong’s ambition to become a crypto hub is receiving support from the Chinese leadership. Representatives from China’s Liaison Office have reportedly been attending crypto events in the city, suggesting a tacit endorsement.

As China maintains a crypto ban, Hong Kong has historically served as a conduit for global companies seeking access to the Chinese market. This positioning could significantly impact Hong Kong’s attractiveness to international crypto firms, according to Arthur Hayes, co-founder of BitMex.

He wrote on his blog:

“If the Chinese capital is there, the Western capital will meet it. That is why the Hong Kong financial markets are so powerful.”

With ongoing support from the government and financial incentives, Cyberport is well-positioned to become a leading destination for Web3 innovation. As Hong Kong implements robust regulations for the cryptocurrency industry, it aims to strike a balance between fostering growth and ensuring investor protection.

The city’s commitment to becoming a global digital asset hub presents significant opportunities for both local and international companies, propelling Hong Kong into a prominent role in the evolving world of Web3 technologies.