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Hong Kong launches crypto sandbox and digital yuan initiatives in web3 push

Hong Kong launches crypto sandbox and digital yuan initiatives in web3 push
People & Culture
Hong Kong announced a number of web3 and crypto initiatives in its budget. Credit: Costfoto/NurPhoto/Shutterstock
Asia Dispatch
  • Hong Kong expands its digital yuan programme and its web3 push.
  • Elsewhere, crypto firms rushed to file licence applications to keep operating in Hong Kong and Bitcoin trends on Weibo.
  • This and much more in this week’s Asia Dispatch.

Hong Kong to expand e-CNY pilot

Hong Kong is steaming ahead with a number of web3 initiatives, according to the city’s 2024-25 Budget, released on February 28.

For starters, the city is set to expand the scope of digital yuan pilot testing.

Financial Secretary Paul Chan said members of the public will be able to set up e-CNY wallets and integrate them with a local payment service.

It’s a quirk in Hong Kong that the mainland’s e-CNY programme seems to get more attention than the city’s homegrown central bank digital currency project based on the Hong Kong dollar.

Nevertheless, Chan said phase two of the pilot programme for e-HKD would commence “soon.”

Meanwhile, phase one of Project mBridge, a cross-border payment service project launched by China, Hong Kong, the United Arab Emirates, and Thailand, is set to launch later in 2024.

“It will become one of the first projects around the world to settle cross-boundary transactions for corporations using central bank digital currencies,” Chan added.

Elsewhere in the budget, Chan discussed how he proposed in the 2023 budget to expedite development of the web 3 ecosystem, and said the city had made “good progress.”

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In tech startup hub Cyberport alone, there are more than 220 crypto and web3 focused companies.

The HKMA is also set to roll out a “sandbox” for entities interested in issuing stablecoins to conduct trials.

Bitcoin is up and so is its ability to make waves across social media.

The hashtag “How crazy is Bitcoin lately” is trending on Weibo as Chinese users discuss Bitcoin’s rising price.

Its value has increased 21.5% over the past seven days and is currently just under $63,000. Its all-time high was almost $69,000 in November 2021.

Bitcoin was the 43rd most popular topic on Weibo on February 29, though it briefly hit the 11th spot the previous day.

While most of the posts concern its price, others warn people about investing, calling it a multi-level marketing game where people brag about the price to try and pump their own bags.

When searching for Bitcoin on Weibo, above the results users also see a warning banner reading: “Stay away from illegal virtual currency transactions and don’t be deceived.”

It’s unclear when this was added, but it was not there as of June 2023, according to the Wayback Machine.

Quick Bites

  • The Hong Kong deadline to apply for virtual asset trading platform licences closed on February 29 with 24 companies applying and two already approved. Those who missed the deadline have until May 31 to wind down operations.
  • Huobi HK reapplied for a Hong Kong licence after withdrawing its application last week.
  • The People’s Power Party in South Korea has backtracked on considering whether to approve a spot Bitcoin ETF in the country should it be reelected in April, according to local media.
  • South Korean Financial Supervisory Service Governor Lee Bok-hyun is set to meet US SEC Chair Gary Gensler in May, after reports last year that they would meet in January.

Callan Quinn is DL News’ Asia Correspondent. Get in touch at callan@dlnews.com.

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