Hong Kong and Singapore have only a one or two-year gap in encryption policy.

Hong Kong has undergone a significant shift in its attitude towards Web3 over the past year, demonstrating a determination to promote the development of the virtual industry. As a member of the Hong Kong Legislative Council representing the technology and innovation sector, Kenneth Fok has been paying attention to the development of virtual currencies and related projects. He believes that while virtual currencies were initially just a niche market, this trend has changed in recent years. Web3 is not only emerging in the financial market but also in personal data and new directions of the internet.

Qiu Dagen compares the current trends in Web3 development to the stage of internet development in 2003. He stated that although virtual currency was initially a smaller field, its development momentum has begun to emerge with technological advancements and the surge of applications.

Hong Kong is catching up with Singapore's encryption policy

When comparing the encryption policies of Hong Kong and Singapore, Qiu Daggen pointed out that the policy directions in both places are similar, but the development focuses differ. Singapore has an advantage in encryption payments, allowing institutions that complete KYC to engage in virtual asset transactions, but it imposes strict regulations on ordinary citizens' transactions. In contrast, Hong Kong's policy formulation is slightly slower, but the overall direction is similar to that of Singapore.

Qiu Dagen believes that Hong Kong and Singapore are only one to two years apart in their timeline for supporting encryption currencies. He stated: "In terms of overall planning, Hong Kong is a bit slower than Singapore, but there is not much difference in policy direction. The issue of opening bank accounts has also been basically resolved, and the two places are only one to two years apart in their timeline for supporting encryption currencies."

It is worth noting that after experiencing several cryptocurrency-related events last year, Singapore seems to have slowed down its development pace in this field, which has also provided more opportunities for Hong Kong to catch up.

Regulations for Hong Kong Dollar Stablecoin to be Introduced Soon

Qiu Dageng stated that the regulatory framework for stablecoins in Hong Kong may be launched in June next year. There are still some issues that need to be addressed, such as whether to allow interest payments to stablecoin holders. He believes that involving commercial banks may be more appropriate than central bank digital currencies.

The Hong Kong dollar stablecoin has unique advantages: first, the issuance of the Hong Kong dollar is supported by US dollar reserves; second, Hong Kong has its own foreign exchange reserves that can be used to support the Hong Kong dollar when the US dollar is unstable. Qiu Dagen predicts that the future may see a coexistence of multiple stablecoins and suggests that investors diversify their assets.

To accelerate the development of the Hong Kong dollar stablecoin, Qiu Dageng suggested that Hong Kong establish a stablecoin sandbox environment. He emphasized that whether it is issuing Hong Kong dollar, US dollar, or Renminbi stablecoins, as long as they are issued in Hong Kong, they must comply with Hong Kong's regulatory requirements.

Regulatory Reflections After the JPEX Incident

The recent JPEX scam incident has raised concerns about cryptocurrency regulation in Hong Kong. Qiu Dageng stated that according to Hong Kong's existing laws, it is difficult to prohibit the operation of an exchange solely based on suspicion without clear victims.

To prevent similar incidents from happening again, Qiu Dagen advises users to only trust exchanges that have obtained licenses. For regulatory authorities, he suggests that the Hong Kong Securities and Futures Commission speed up the licensing review process and take more decisive measures against exchanges that clearly do not meet the regulations.

Qiu Dagen believes that this incident is also a process of investor education. What Hong Kong encourages is not asset speculation, but the development of digital assets and the innovation of financial products. He stated: "If Hong Kong does not participate, it will fall behind, whether in the fields of stablecoins, CBDCs, or virtual currencies."

Despite facing numerous challenges, such as policy uncertainty and risks associated with trading platforms, Qiu Dageng remains optimistic about Hong Kong's development in the digital asset sector. He believes that with a solid foundation and ample opportunities, Hong Kong is poised to take a leading position in this emerging field.