Hong Kong’s growing interest in Web3 could lure businesses away from the U.S., experts say

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Yat Siu

4th July 2023 – (Hong Kong) According to industry experts, Hong Kong’s recent moves to foster the development of Web3, blockchain technology, and cryptocurrencies could attract businesses to its jurisdiction, away from the United States. The city’s Task Force on Promoting Web3 Development is the latest example of its efforts to enable retail investment into cryptocurrencies and support the Web3 space.

Yat Siu, co-founder of Web3 investment firm Animoca Brands, is one of the 15 industry experts invited to advise the task force, which will interface with key government officials and financial regulators. In an exclusive interview with Cointelegraph, Siu highlighted Hong Kong’s shift in attitude towards crypto and Web3 in recent years, putting it in a unique position to lure startups and established firms.

Siu admitted that the U.S. should not be “counted out” of the Web3 race but added that many firms in the sector are operating “under a regime of fear” due to a lack of regulatory clarity. He believes that the SEC’s recent charges against Binance.U.S. and Coinbase for alleged unregistered securities offerings have further exacerbated this situation. Siu praised Hong Kong’s consistency in regulatory rules, in contrast to the U.S., Japan, the Middle East, and Europe.

Hong Kong’s restrictive policies outlawing retail investment into cryptocurrencies were overturned only recently after lengthy consultations with industry proponents. Siu said that the government had demonstrated “agility” in changing its stance towards the industry, despite not always welcoming cryptocurrency companies.

The Web3 task force is expected to be fluid, with monthly or quarterly meetings with crypto, blockchain, and Web3 working groups established in Hong Kong. Members of the task force have entered into a two-year agreement with the Hong Kong government and will advise on ways to drive the growth of the industry. Siu envisions the task force fostering talent and encouraging exploration of blockchain solutions in tertiary education institutions.

Hong Kong’s efforts to kindle the Web3 sector have seen over 150 Web3 firms attracted to the city’s Cyberport this year. Companies are reportedly spending between US$2 million to US$25 million on acquiring virtual asset service provider licenses to operate in the city.