The city is positioned as a major financial hub in the digital era due to its strategic approach to both AI and cryptocurrency. With an emphasis on cryptocurrencies and artificial intelligence (AI), Hong Kong is intensifying its dedication to technical innovation.
At Hong Kong FinTech Week 2024, Paul Chan, the Financial Secretary, and Christopher Hui, the Secretary for Financial Services and the Treasury, gave speeches on Monday outlining the Hong Kong Monetary Authority’s (HKMA) comprehensive plan to leverage these emerging technologies and establish Hong Kong as a global financial hub.
Hong Kong is creating a uniform regulatory framework that will provide financial firms clarity and consistency in order to fully utilize AI. This framework seeks to ensure the appropriate development and application of AI technology by striking a balance between innovation and risk reduction.
“Hong Kong’s financial sector has what it takes to promote AI adoption – sizeable markets and rich scenarios,” said Christopher Hui, the Treasury’s secretary for financial services. “We will take a dual-track approach to promote development while addressing challenges.”
Local academic institutions are actively creating cutting-edge AI models that are suited to the particular requirements of the financial sector, including the Hong Kong University of Science and Technology. According to Hui, these models will provide financial institutions the ability to make data-driven choices, increase risk management, and better client experiences.
Adopting Crypto
As a major force behind future expansion, Hong Kong is also adopting cryptocurrencies in addition to AI. Hui claimed that because Hong Kong is expanding tax benefits to cover investments in virtual assets, the city is becoming a desirable location for companies involved in the cryptocurrency industry. The city’s larger plan to create an atmosphere that is favorable to cutting-edge technology, such as blockchain and cryptocurrencies, is in line with this action.
“This move will further recognize its role for asset allocation,” Hui added.
He noted that Hong Kong hopes to draw talent and capital from around the world to its developing crypto economy by providing attractive tax benefits.
Only three operators of virtual asset trading platforms—HKVAX, HashKey Exchange, and OSL Exchange—have official licenses from the SFC at the moment. However, the regulator stated that it is expediting the licensing procedure and anticipates awarding the first set of formal licenses to deemed-to-be-licensed VATP applicants by the end of this year.
Index
The business said Monday that Hong Kong Exchanges and Clearing (HKEX) will begin a virtual asset index series on November 15.
“We aim to empower investors to make well-informed investment choices by providing transparent and dependable real-time benchmarks. This will bolster the growth of the virtual asset ecosystem and strengthen Hong Kong’s position as a global financial hub,” stated Bonnie Y. Chan, CEO of HKEX.
CCData, a benchmark administrator and virtual asset data and index provider registered in the UK, will manage and construct the index. CoinDesk is the owner of CCData.
Both a reference rate and a reference index for bitcoin (BTC) and ether (ETH) will be included of the index series.
Using prices compiled from the best virtual asset exchanges, the reference index is a 24-hour volume weighted reference spot price of ether or bitcoin. It will be valued in US dollars and computed in real time.
The reference rate, which is determined every day at 4:00 PM Hong Kong time, is intended for the settlement of financial products.
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