Crypto Quill

Hong Kong, the former British colony and one of the world’s financial hubs, has recently expressed its ambition to become a leader in the field of virtual assets. This comes after the US Securities and Exchange Commission (SEC) approved several applications for spot Bitcoin exchange-traded funds (ETFs), which are expected to boost the demand and liquidity of digital currencies.

What are virtual assets and why are they important?

Virtual assets are any digital representation of value that can be stored, transferred, or traded on a blockchain network. They include cryptocurrencies, such as Bitcoin, Ethereum, and Dogecoin, as well as tokens, such as utility tokens, security tokens, and non-fungible tokens (NFTs). Virtual assets have many potential benefits for investors, businesses, and society at large. They offer:

• Decentralization: Virtual assets are not controlled by any central authority or intermediary, which reduces the risk of censorship, manipulation, or fraud.
• Transparency: Virtual assets are recorded on a public ledger that anyone can access and verify, which increases the trust and accountability of transactions.
• Efficiency: Virtual assets can be processed faster and cheaper than traditional payment systems, which improves the scalability and accessibility of financial services.
• Innovation: Virtual assets enable new forms of value creation and exchange that were not possible before, such as smart contracts, decentralized applications (DApps), decentralized finance (DeFi), Web3 platforms, NFTs, and metaverse.

How does Hong Kong plan to become a global leader in virtual assets?

Hong Kong has been actively promoting its vision to become a global center for digital trading and innovation in virtual assets. One of the key steps is to implement ETFs that track the price of spot Bitcoin or other cryptocurrencies on local exchanges. This would allow investors to gain exposure to the crypto market without having to buy or store actual coins.

According to Johnny Ng Ka-wing, a member of the Legislative Council of Hong Kong, Hong Kong has the potential and must dare to become a leader in this field. He said that he supports drafting and implementing innovative policies to support investments in virtual assets. He also urged the SAR Government to launch ETFs as soon as possible, adding that it would help Hong Kong cement its position in the global market.

Ng also proposed two other ideas: creating educational material for virtual assets among common citizens in Asia, especially institutions, so that they can understand what virtual assets are and how they can use technology to advance; and strengthening control over criminal activities in this field, such as money laundering, tax evasion, fraud, etc.

Ng has been vocal about his interest in virtual assets since 2019. He has met with several prominent figures in this space, such as Sandeep Nailwal, the founder of Polygon, a layer-2 scaling solution for Ethereum; Changpeng Zhao, also known as CZ or Binance CEO; Jack Dorsey